Falcone’s LightSquared Nears $585 Million Loan Accord
Philip Falcone
Brendan Smialowski/Bloomberg
Philip Falcone’s LightSquared Inc. wireless venture is in discussions to use Sprint Nextel Corp.’s cell sites and equipment to help build out its network, three people familiar with the talks said.
Philip Falcone’s LightSquared Inc. wireless venture is in discussions to use Sprint Nextel Corp.’s cell sites and equipment to help build out its network, three people familiar with the talks said. Photographer: Brendan Smialowski/Bloomberg
Philip Falcone’s LightSquared Inc. venture is close to securing a $585 million loan to build its wireless network, as it negotiates a wholesale deal with a nationwide carrier, said two people familiar with the plans.
An official announcement of the loan could come as early as today, said the people, who wouldn’t be identified because the deal isn’t public. The loan, from UBS AG and JPMorgan Chase & Co., will bring LightSquared’s cash on hand to about $1 billion, said one of the people. The company has said it currently has roughly $1.75 billion in debt and equity.
LightSquared said this week it has agreements with five customers to provide wholesale fourth-generation service, including two carriers, a national retailer, a device manufacturer and a website.
LightSquared is seeking to compete with AT&T Inc., Verizon Wireless and Clearwire Corp. in selling 4G capacity. The company plans to offer space on its network to retailers, computer manufacturers and consumer electronics makers, allowing companies such as Apple Inc. and Sony Corp. to sell their own wireless service in competition with existing providers.
Under a Federal Communications Commission order, the company has to build a network that covers up to 100 million Americans by the end of 2012 and 260 million by 2016. The new funds are in addition to an existing $850 million credit facility Reston, Virginia-based LightSquared has with UBS, said one of the people.
Satellite Bid?
Last month, LightSquared received a waiver from the FCC lifting a requirement that devices using its service communicate directly with satellites, expanding its potential customer base. The FCC said LightSquared must participate in a working group with makers and users of global-positioning systems to ensure its service doesn’t interfere with those communications.
LightSquared is preparing a bid for the satellite companies TerreStar Corp. and DBSD North America Inc., two people said this month.
Tasha Pelio, a JPMorgan spokeswoman, declined in an e-mail to comment. Karina Byrne, a UBS spokeswoman, said in an e-mail she didn’t have an immediate comment. Audrey Schaefer, a LightSquared spokeswoman, said the company is in discussions with investors all the time and there is nothing new to report.
LightSquared, backed by Falcone’s Harbinger Capital Partners hedge fund, will begin network trials this year in Las Vegas, Baltimore, Denver and Phoenix after completing testing in a lab in the Dallas area.
The company is negotiating agreements for nationwide wholesale service with carriers both based in and outside the U.S., said one of the people.
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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