LightSquared’s hedge fund equity owner has proposed breaking up the US satellite/terrestrial venture under a new competing Chapter 11 reorganisation plan.
Harbinger Capital Partners said its plan would inject new money for the assets of LightSquared…
LightSquared’s hedge fund equity owner has proposed breaking up the US satellite/terrestrial venture under a new competing Chapter 11 reorganisation plan.
Harbinger Capital Partners said its plan would inject new money for the assets of LightSquared Inc, which holds a smaller swathe of spectrum than the company’s main LightSquared LP unit.
It would involve US$460m in new DIP financing, of which roughly US$360m would be converted into exit financing, and US$100m in revolving exit financing. It would also see the issuance of new debt and equity instruments to wipe out Inc’s existing claims.
The plan was submitted shortly after LightSquared filed its own proposal, which would keep the venture intact but would take all the equity from Harbinger.
Harbinger has already rejected that plan and so too has Mast Capital Management, which is an Inc creditor and has reportedly said it may submit its own proposal to split the venture up.
US bankruptcy judge Shelley Chapman said during a hearing on 11 August that she would consider a date around 20 October to consider the competing proposals, according to court reports.
LightSquared’s Chapter 11 process had at one point managed to whittle down competing restructuring proposals to just one, but this was thrown out once it was put to Chapman because it was unfair on satellite TV mogul Charlie Ergen, who owns the largest proportion of its debt through his SPSO vehicle.
LightSquared filed for voluntary reorganisation back in May 2012 after its spectrum was found to interfere with GPS technology. The company is still talking with regulators for a way around this issue.