Falcone's LightSquared Wireless Venture Said to Get $750 Million UBS Loan
Philip Falcone’s LightSquared venture obtained a $750 million four-year loan from UBS AG as it seeks funds to offer wireless service to 260 million people over the next five years, two people familiar with the matter said.
The loan from Zurich-based UBS is secured by assets and subsidiaries of LightSquared, said the people who asked not to be identified because the financing details aren’t public. Falcone needs $5 billion to build the network, according to an estimate from Oppenheimer & Co. analyst Tim Horan.
The venture plans to compete with Sprint Nextel Corp., AT&T Inc. and Verizon Wireless by selling capacity on its so-called 4G network to technology companies. It is building its network to as many as nine U.S. metro areas by the end of next year, according to company documents distributed late last year.
Kelly Smith, a UBS spokeswoman in New York, and Tom Surface, a spokesman for LightSquared, declined to comment.
LightSquared, based in Reston, Virginia, was formed through billionaire Falcone’s roughly $500 million acquisition of SkyTerra Communications Inc. and backed by his Harbinger Capital Partners hedge fund. The venture said in July it had obtained $1.75 billion in initial funding commitments.
LightSquared has said it will begin trials in Baltimore, Phoenix, Las Vegas and Denver by early 2011 and has committed to spending $7 billion over eight years through an agreement with Nokia Siemens Networks to build and manage the network.
Chief Executive Officer Sanjiv Ahuja said last month he was in advanced talks with 10 potential customers or partners.
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net
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