US satellite/terrestrial wireless broadband venture LightSquared has secured a four-year US$750m loan from UBS, reported Bloomberg.
Citing two sources close to the matter, the report says the loan is secured by assets and subsidiaries of LightSquared,…
US satellite/terrestrial wireless broadband venture LightSquared has secured a four-year US$750m loan from UBS, reported Bloomberg.
Citing two sources close to the matter, the report says the loan is secured by assets and subsidiaries of LightSquared, which is backed by US hedge fund Harbinger Capital Partners. UBS along with BoA Merrill Lynch has been advising LightSquared on its financing options.
LightSquared has so far secured debt and equity financing of approximately US$1.75bn, while Harbinger has already contributed US$2.9bn of assets to the project, including the nascent mobile satellite services operator SkyTerra that Harbinger bought out for US$262.5m earlier this year. The total cost to roll out the project has been estimated at between US$4bn and US$5bn, not taking into account the additional costs related its commercial launch.
In order to secure Federal Communications Commission approval for the project, LightSquared has committed to an aggressive build-out schedule, promising coverage to at least 100 million people in the US by December 31, 2012, at least 145 million people by December 31, 2013, and at least 260 million people by the end of December 2015. Earlier this year the group signed an US$7bn eight-year contract with European vendor Nokia Siemens Networks to deploy, install, operate and maintain the network.
In related news, South Korea’s SK Telecom told Reuters that it is in discussions to acquire a stake in the venture for US$100m. A spokesperson is cited in the brief report insisting that terms have yet to be agreed.
SK Telecom, LightSquared and UBS were unable to comment.
