Globalstar secures $200m of funding
March 31, 2023
By Chris Forrester
Satellite operator Globalstar, which has an agreement with Apple to connect smartphones via satellite for emergency services, has secured a $200 million (€183.6m) loan which means that debts can be paid and puts capital in place for expansion.
The Globalstar borrowing comes from an affiliate of Värde Partners, and is in the form of 13 per cent Senior Notes due in 2029.
The proceeds from the notes will be used primarily to repay all remaining amounts due under Globalstar’s 2019 facility agreement of approximately $148 million. The remaining proceeds will be used for fees and general corporate purposes.
Dave Kagan, Globalstar’s CEO, said “We can now shift our focus to executing our business plan across our four pillars of value creation, which include transitioning to more wholesale revenue generated from satellite capacity, our rapidly expanding IoT services and the continuing revenue and profitability from our legacy business and retail SPOT customers. The fourth pillar, our largest opportunity, is spectrum monetisation on a global basis anchored by Band 53 in 11 countries and counting with an expanding ecosystem that facilitates deployments. We are now well positioned for a bright future with increasing opportunities and a balance sheet to help us realise those opportunities.”
The transaction is expected to close imminently. The notes are non-convertible and therefore do not result in equity dilution. Goldman Sachs acted as exclusive placement agent to Globalstar in connection with the financing.
A month ago Apple itself loaned Globalstar $252 million as a down payment for its smartphone-based services. Apple said it was providing the funds as a prepayment for using the satellite network to upgrade satellite services launched last year for its latest iPhone, which can connect with one of Globalstar’s existing 24 satellites in LEO for emergency services outside cellular coverage.
Globalstar is buying an additional 17 satellites to be launched by the end of 2025, plus a possible extra 9 satellites, to help provide the global service. Globalstar said it is allocating 85 percent of the capacity on its next-generation constellation to Apple. The operator plans to continue offering legac