US satellite/terrestrial venture LightSquared has agreed conditions with other lenders for access to its US$190m of cash on hand.
LightSquared had warned that it faced liquidation without sufficient access to the capital.
The lenders, which include…
US satellite/terrestrial venture LightSquared has agreed conditions with other lenders for access to its US$190m of cash on hand.
LightSquared had warned that it faced liquidation without sufficient access to the capital.
The lenders, which include hedge funds Appaloosa Management, Fortress Investment Group and Silver Point Capital, represent around US$1bn of debt. They were calling for strict budget controls on the cash to protect their resources.
Court reports explain that, after hearings were adjourned three times to allow the parties to hammer out a deal, the lenders permitted LightSquared to access the cash in return for being paid US$6.25m a month. Under the conditions, the company would have to adhere to a budget of no more than 15% variance on operating expenses. In addition, the lenders have the option of returning the matter to court to terminate the use of the cash.
Matthew Barr, a Milbank lawyer acting on behalf of LightSquared, was quoted telling Judge Shelley Chapman, at the US Bankruptcy Court in Manhattan, that the cash collateral will allow the company to fund operations until September 2013.
Meanwhile, the venture has reportedly agreed a debtor-in-possession loan in principle with a unit of US Bancorp (USB).
The USB unit represents a group of lenders holding around US$320m of debt, and Barr was quoted on 12 June saying that the loan’s details will be announced in a matter of days.
