US satellite/terrestrial venture LightSquared has filed plans for the US$40m debtor in possession loan it has secured with US Bank for court approval.
The loan, which is subject to interim Bankruptcy Court approval on 28 June and final approval on 27…
US satellite/terrestrial venture LightSquared has filed plans for the US$40m debtor in possession loan it has secured with US Bank for court approval.
The loan, which is subject to interim Bankruptcy Court approval on 28 June and final approval on 27 July, would be secured by so-called super-priority liens on the group’s assets.
It will carry an interest rate of 11%, payable in kind, and a maturity date of 15 November 2013, although it could mature earlier depending on LightSquared’s Chapter 11 process.
Access to the US$40m facility will be released in stages. An initial US$10m will be dispensed when it receives interim court approval, followed by a further US$15m if it is granted the final green-light. A US$5m pot has been earmarked to fund build-out expenditures, and a final US$10m can be released later at the lenders’ discretion.
LightSquared would have to pay an upfront fee of 3%, payable in kind, on the date of the initial funding of the loan, which also has an exit fee of 2%, payable in cash on the maturity date.
The loan was secured in principle earlier this month with US Bank, which represents a group of LightSquared lenders holding around US$320m of debt.
The court has set a deadline of 25 June for objections to the DIP request.
Last week, LightSquared won a heated battle with a separate group of lenders over access to its US$190m of cash on hand. The lenders, including hedge funds Appaloosa Management, Fortress Investment Group and Silver Point Capital, granted the venture access to the cash after it agreed to strict budgetary conditions on how it could be used. LightSquared had warned it faced liquidation if it was denied sufficient access to the capital.
