Mobile satellite operator Globalstar has agreed to acquire a further six spacecraft from Thales Alenia Space, after the two companies settled their contract dispute.
The mutual settlement also ensures that Thales will complete work on the remaining…
Mobile satellite operator Globalstar has agreed to acquire a further six spacecraft from Thales Alenia Space, after the two companies settled their contract dispute.
The mutual settlement also ensures that Thales will complete work on the remaining four satellites it is building for Globalstar, paving the way for a fourth launch of six second generation birds later this year.
Globalstar, which had warned it could be forced into Chapter 11 bankruptcy protection if it was unable to resolve the dispute, said it now expects Thales to begin constructing the additional satellites before the end of 2012.
“This agreement both settles the previous disputes between Globalstar and Thales and establishes a clean slate for the programme once again such that the parties are now positioned to work as strategic partners for the long-term,” said GlobalStar CEO Jay Monroe.
Back in May, arbitrators ruled in Thales’ favour over their dispute, requiring Globalstar to pay the manufacturer around €53m in contract termination charges by 9 June. But the operator announced on 11 June that it had not paid these charges, and it was instead negotiating with Thales for another resolution.
Thales, meanwhile, notified Coface that it would consider a failure of Globalstar to pay the charges as a default on a US$586.3m loan the operator secured with the French bank in 2009 for the project.
The companies did not disclose the terms of the settlement, but Globalstar said in a statement on 25 June that it and “Thales expect to enter into a commercial contract based upon these terms in the near future”.
Globalstar and Thales’ 2009 agreement has already seen the operator purchase 25 satellites for its second generation constellation. Globalstar had sought to order a further 23 birds under the same terms as its first batch. Thales’ refusal to do so, owing to a series of issues including manufacturing delays, is what led to the contract dispute.
