GlobalStar (GSAT) Executes Refinancing With French Lender Consortium and New Second Lien Credit Facility (Earlier)

Globalstar, Inc. (NYSE American: GSAT) announced today that it has successfully refinanced its capital structure by executing an amendment of its existing senior secured credit facility ("Senior Facility”) and raising a new six-year second lien term loan facility (“Second Lien Facility”) led by Thermo, the controlling shareholder in Globalstar, and EchoStar Corporation, a premier global provider of satellite communication solutions.

The proceeds from the $199 million Second Lien Facility, which matures in November 2025, will be used towards the prepayment of scheduled Senior Facility principal payments in the amount of $152 million as well as to pay off the $66 million bridge facility raised in June 2019. The loans under the Second Lien Facility bear payment-in-kind interest at a blended annual rate of 13.5%, and the Second Lien Facility lenders received warrants to purchase 7% of the Company’s outstanding shares on a fully diluted basis. The amended terms of the Senior Facility include primarily (i) revisions to the remaining repayment schedule to reduce the amount of principal payments required prior to maturity from $300 million to $85 million, leaving a final principal balance of approximately $59 million (net of the debt service reserve account) due on December 31, 2022, and (ii) a reset of financial covenant levels together with an extension of our ability to make equity cures through maturity. In connection with this refinancing, Thermo agreed to voluntarily convert its 2009 subordinated loan to equity at $0.69 per share in early 2020.

Jay Monroe, Executive Chairman of Globalstar, said, “This is a great day for Globalstar, all of our shareholders, and existing and new lenders. The transaction significantly improves our balance sheet, provides us with runway, keeps the favorable pricing of our existing credit facility in place and enhances our relationship with EchoStar, one of the most respected satellite and telecommunications companies in the world. We spent a considerable amount of time this year selecting the solution that we believe is best for the Company and our shareholders and are thankful to all participating parties who worked together to complete this financing.”

Mike Dugan, CEO and President of EchoStar, said, “We believe Globalstar’s refinancing and the Second Lien Facility positions the Company to realize the upside from their collection of spectrum and satellite assets. With Globalstar, we see a satellite business that should experience renewed growth in a connected IoT world combined with a worldwide multi-band spectrum position. EchoStar continues to invest in S-band spectrum assets across the globe and we see potential opportunities to collaborate with Globalstar in S-band development.”

Pradman Kaul, President of Hughes Network Systems, LLC, added, “Globalstar and EchoStar, through its Hughes business, have worked together for more than a dozen years. Hughes designed and developed the second-generation ground network system for Globalstar and we look forward to exploring ways we can work together to continue meeting the growing demands for connectivity across all of our market segments.”

The Company will conduct an investor conference call on Monday, December 2, 2019 at 8:30 a.m. ET to discuss this refinancing.

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