Globalstar Seeks New Backers
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Bankrupt mobile satellite phone specialist Globalstar is seeking new investors after an agreement for $55 million in new financing collapsed.
Would-be backer New Valley Corp. said its debtor-in-possession deal unwound yesterday over a disagreement of terms with the company's creditors, who include Loral Space & Communications and Qualcomm, among others.
A Globalstar spokesman was not immediately available to discuss the affect of New Valley's pullout.
In a statement, the company said, "Globalstar is now continuing discussions with potential investors, and the company is confident that another restructuring plan will be developed in the future."
Globalstar planned to use the New Valley's money to complete its reorganization plan which involved: lowering prices in North America; consolidating sales and technical operations in the United States, Canada, the Caribbean and parts of Europe; and establishing a new marketing and sales structure targeting specific vertical industries.
San Jose, Calif.-based Globalstar, which has 83,000 customers in 100 countries for its voice and data services, was also working to finalize new business agreements with service providers in key markets. The company's service is used where landline or cellular service doesn't reach, such as at sea.
Any new financing and restructuring plans must pass muster with the U.S. Bankruptcy Court judge overseeing the case.