MSS operator Globalstar has signed a committed issuer managed equity financing facility of up to US$30m from Terrapin Opportunity, an investment fund that specialises in providing public and private ‘equity line’ products to technology and biotech…
MSS operator Globalstar has signed a committed issuer managed equity financing facility of up to US$30m from Terrapin Opportunity, an investment fund that specialises in providing public and private ‘equity line’ products to technology and biotech companies.
Under the terms of the transaction, Globalstar can draw up to US$30m over a 24-month period by requiring Terrapin to purchase a specified dollar amount of shares of the company’s common stock. The per share purchase price will be determined by the price of the share per day over the 10 consecutive trading days prior to the draw down notice less a discount range from 3.5% to 8% based on the amount Globalstar requests.
Commenting on the deal, Globalstar’s CEO Jay Monroe said: “This facility provides us with funds to help finance our capital obligations over the next two years. The structure of this facility gives us flexibility and pricing control that we can use to manage the potential dilution of additional equity.
“On the basis of the past year’s revenue and profit growth and our execution on our long-term strategic plan, this financing demonstrates investors’ increased confidence in Globalstar as we continue with final preparations for our fourth launch of six new satellites in February.”
Financial West Group is acting as Globalstar’s placement agent on the financing facility.
The financing comes just over a week after Globalstar delisted from the Nasdaq stock exchange having failed to comply with listing rules that require a minimum bid price of US$1 per share.
The company had considered effecting a reverse stock split in order to seek to regain compliance but decided against it and now anticipates that its stock will trade over the counter (OTC) under its current GSAT symbol.
Following the delisting, Monroe said that Globalstar intends to seek a listing on an accredited exchange as soon as it is feasible to do so.
Globalstar told SatelliteFinance that the de-listing did not impact the discussions with Terrapin.
The company added that the US$30m from this financing will not be used towards the larger financing required to fund approximately 85% of the €149.9m contract with Thales to purchase six further spacecraft.
