Globalstar Announces Extension of Forbearance Agreement Regarding 5.75% Senior
COVINGTON, La., April 22, 2013 (GLOBE NEWSWIRE) -- Globalstar, Inc.
(OTCBB:GSAT) announced today that the forbearance agreement with respect to
the Company's 5.75% Convertible Senior Notes due 2028 (the "Existing Notes")
has been amended to extend the forbearance period through 11:59 pm (ET) on
April 29, 2013 as negotiations with the forbearing note holders continue.
Additionally, the extension will allow additional time to obtain required
consents from the Company's senior secured lenders regarding an exchange
transaction. To the extent this process is not complete by April 29, 2013, the
forbearance agreement may be extended further by agreement of the parties;
however, there is no assurance any further extension will be provided.
In exchange for the extension, the Company has agreed to issue shares of its
voting common stock to the forbearing note holders who have executed the most
recent amendment if an exchange transaction is not consummated within five
days after the end of the forbearance period.
Jay Monroe, Globalstar's Chairman and CEO, said, "This extension was necessary
to provide the additional time necessary to secure the proper approvals to
consummate a transaction. We look forward to a successful exchange transaction
and will continue to provide updates regarding this process."
As described in the Company's Current Report on Form 8-K filed on April 1,
2013, pursuant to the forbearance agreement, the forbearing note holders have
agreed, during the forbearance period, not to exercise any rights or remedies
under the Existing Notes on account of the failure by the Company either to
repurchase the Existing Notes upon the April 1, 2013 put date or to make its
regularly scheduled April 1, 2013 interest payment (together, the "Specified
Defaults"), including without limitation, taking any action to accelerate the
Existing Notes. The forbearing note holders have also directed the trustee not
to take any action on account of the Specified Defaults.
The Company's other series of senior unsecured notes include cross
acceleration provisions which may be triggered by an acceleration of the
Existing Notes if such acceleration is not rescinded within 30 days.
Accordingly, so long as the forbearance period is extended, the Existing Notes
cannot be accelerated and no cross-acceleration provisions of the other series
of notes will be triggered as a result of the Specified Defaults. Should the
forbearance period terminate and the Company not cure the Specified Defaults,
cross-acceleration would be triggered only if the Existing Notes are
accelerated and the acceleration is not rescinded within 30 days.
Any exchange arrangement for the Existing Notes is subject to final
negotiation and execution of definitive agreements. Globalstar is seeking the
consent of the lenders under its senior secured credit facility to the
restructuring; however, there is no assurance such consent will be obtained.
Until definitive agreements are negotiated in their entirety and executed, and
the transactions contemplated thereby are consummated, there can be no
assurance that any debt restructuring will be completed by the end of the
forbearance period or at all.
This press release does not constitute an offer to purchase or a solicitation
of an offer to purchase any security and does not constitute an offer,
solicitation or sale in any jurisdiction in which such offering, solicitation
or sale would be unlawful.
About Globalstar, Inc.
Globalstar is a leading provider of mobile satellite voice and data services.
Globalstar offers these services to commercial customers and recreational
consumers in more than 120 countries around the world. The Company's products
include mobile and fixed satellite telephones, simplex and duplex satellite
data modems, the SPOT family of mobile satellite consumer products including
the SPOT Satellite GPS Messenger and flexible airtime service packages. Many
land based and maritime industries benefit from Globalstar with increased
productivity from remote areas beyond cellular and landline service. Global
customer segments include: oil and gas, government, mining, forestry,
commercial fishing, utilities, military, transportation, heavy construction,
emergency preparedness, and business continuity as well as individual
recreational consumers. Globalstar data solutions are ideal for various asset
and personal tracking, data monitoring and SCADA applications. All SPOT
products described in Globalstar or SPOT LLC press releases are the products
of Spot LLC, which is not affiliated in any manner with Spot Image of
Toulouse, France or Spot Image Corporation of Chantilly, Virginia.
For more information regarding Globalstar, please visit Globalstar's web site
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current expectations
and assumptions that are subject to risks and uncertainties which may cause
actual results to differ materially from the forward-looking statements.
Forward-looking statements, such as the statements regarding the Company's
ability to complete its launch program and restore the quality of its Duplex
service and other statements contained in this release regarding matters that
are not historical facts, involve predictions.
Any forward-looking statements made in this press release speak as of the date
made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied
in the forward-looking statements, and Globalstar undertakes no obligation to
update any such statements. Additional information on factors that could
influence the Company's financial results is included in its filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
CONTACT: For further media information:
Timothy E. Taylor
For further investor information:
Jody Burfening/Carolyn Capaccio
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