Globalstar have announced that Coface have agreed to provide a guaranty in support of a proposed credit facility to be extended by a syndicate of banks to Globalstar as borrower. Coface, the export credit agency acting on behalf of the French government, have advised Globalstar that they intend to provide long-term credit insurance to facilitate the proposed credit facility. Pivotel are exclusive licence holders for Globalstar in Australia.
Banks who have received initial credit committee approvals in relation to the 6.30% interest rate credit facility include BNP Paribas, Natixis, and Société Générale, which would act as mandated lead arrangers (BNP Paribas is acting as Coface Agent). The credit facility and receipt of funding by Globalstar is subject to closing conditions and there can be no assurance at this time that any such closing will actually occur.
The principal closing conditions include the conversion into equity at closing of senior secured term and revolving credit loans to Globalstar from their principal stockholder, Thermo Funding Company LLC and the receipt by Globalstar of additional equity and contingent equity in an amount of $100 million, most of which is expected to be provided by Thermo Funding.
Globalstar intend to use the financing to solidify their long-term space system by funding the manufacture and delivery of the Globalstar second-generation satellites by Thales Alenia Space as well as the launch of those satellites by launch services provider Arianespace.
The financing would also be used to facilitate certain long-lead items connected with the accelerated delivery of the company’s second-generation satellites, the completion of Globalstar’s next-generation ground facilities and the design of Globalstar’s next generation of satellite interface chipsets.
The second-generation satellite constellation of Globalstar has a 15-year design life and is expected to secure Globalstar’s space segment beyond 2025. The proposed financing would pave the way for the delivery and launch of second-generation satellites including the accelerated delivery of these satellites. The launch and deployment of the second generation satellite constellation is scheduled to begin later this year.
The financing would also be used to facilitate the construction of the Globalstar next generation ground network and the design and delivery of Globalstar’s next-generation satellite interface chipsets. The ground network upgrades will support the company’s new mobile satellite services, which will feature voice quality as well as increased data speeds to both handheld and fixed subscriber equipment.
The new interface chipsets will be used to provide satellite capability to various next generation Globalstar handsets, fixed units and modem-equipped transceivers and transmitters. These new Globalstar devices are expected to be manufactured for a fraction of the cost of company’s current first and second-generation handsets and data modems.
Globalstar also expect to provide inexpensive interface chips to various manufacturers of terrestrial wireless handsets looking to affordably integrate Globalstar’s embedded technology and satellite coverage into their handheld devices. When compared to the current costs of integration, Globalstar anticipate reduced interface chipset pricing and material costs for the production of these next-generation multi-mode solutions.