Globalstar, Inc. (NYSE American: GSAT) has announced that, in consultation with the Strategic Review Committee of its board of directors and the company´s financial advisors, it has decided to proceed with an amendment to the current BPIFAE Facility Agreement together with a capital raise of a new second lien credit facility, the company said.
Of the two financing options disclosed on August 9, 2019, the amendment was determined to be the optimal path.
In June, the company reached an agreement in principle on the terms of the pending amendment with the BPIFAE lenders and the requisite credit committee approvals have since been received. Additionally, the material terms of the second lien facility have been agreed. Closing of these transactions is subject to final definitive documentation and customary closing requirements and conditions.
The amendment provides for (i) prepayment of the next three scheduled principal payments primarily using proceeds from the new second lien term loan facility, (ii) revisions to the remaining repayment schedule to reduce the amount of scheduled payments of principal required prior to maturity, and (iii) a reset of financial covenant levels together with an extension of the availability of the cure mechanism under the BPIFAE Facility.
To support the transaction, Thermo has agreed to a voluntary conversion of the existing USD 127.1 million Thermo Subordinated Loan Facility at the stipulated conversion price of USD 0.69 per share.
The terms and economics of the second lien term loan facility are expected to be in line with the USD 62.0 million June bridge facility except the payable-in-kind interest shall not exceed 14% as compared to 15% in the bridge facility. The bridge facility will be repaid in full with proceeds from the second lien facility. The company is expected to close the amendment and the second lien facility in the next 30-45 days.
Globalstar is a provider of customizable Satellite IoT Solutions for customers around the world in industries such as oil and gas, transportation, emergency management, government, maritime and outdoor recreation. A pioneer of mobile satellite voice and data services, Globalstar allows businesses to streamline operations by connecting people to their devices, supplying personal safety and communication, and automating data to more easily monitor and manage mobile assets via the Globalstar Satellite Network. Learn more at Globalstar.com.