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Blackstone advises teetering TerreStar – sources
Cash-strapped telecom TerreStar Corp is working with a restructuring team from Blackstone Group (BX.N) in negotiations with its major creditors, including Phil Falcone’s Harbinger Capital Partners, according to people familiar with the situation.
Reston, Virginia-based TerreStar hired the restructuring arm of private equity firm Blackstone to head up the talks with its bondholders several weeks ago in a bid to stave off a bankruptcy filing, the sources said.
Douglas Brandon, TerreStar’s general counsel, declined to comment.
TerreStar, which is trying to build a wireless network that relies on both satellite and earth-based communications systems, said in an Aug. 6 regulatory filing that it may have to file for Chapter 11 bankruptcy protection.
Reuters reported on Thursday that the company could soon file for bankruptcy if the restructuring talks prove fruitless. In Friday trading on the Nasdaq stock market, TerreStar shares were down 14 cents, or 36 percent, to 25 cents.
In the event of a bankruptcy, some of TerreStar’s bondholders, including Harbinger, are prepared to step in and provide the company with debtor-in-possession financing to enable it to continue operating during the Chapter 11 proceedings, sources familiar with the situation said.
In the restructuring talks, Harbinger, a New York-based hedge fund with more than $6 billion in assets spread across a half-dozen funds, is being advised by bankers from UBS (UBS.N).
Falcone’s hedge fund is TerreStar’s biggest equity holder and owns $150 million of the company’s nearly $1 billion in debt, according to regulatory filings.
Harbinger owns a rival telecom company, LightSquared, which has entered into a number of lease agreements with TerreStar.
A Harbinger spokesman did not return a phone call seeking comment. UBS and Blackstone declined to comment.
In July, UBS arranged a $400 million financing package for Harbinger. The hedge fund pledged billions of dollars in assets as collateral, including its equity interest in the holding company for LightSquared.
Inmarsat UK Brings 50Mb Satellite Internet and TV
Inmarsat, a UK broadband ISP and communications operator, has announced the signing of a major new contract with Boeing for the delivery of three state-of-the-art Ka-Band (702HP) satellites. The new additions are capable of offering live television and “super-fast” internet download speeds of up to 50Mbps (Megabits per second) to both ships at sea and airliners.
The satellites will make up a new Inmarsat-5 (I-5) constellation and should enter operation sometime in 2014, forming part of the groups new Global Xpress™ network. The service will cost £750m ($1.2bn) to develop and target an £880m (US$1.4bn) incremental market for VSAT services.
Boeing itself will become a key distribution partner for Inmarsat’s Ka-band and L-band satellite services, committing itself to a capacity purchase for over 10% of the target Ka-band revenues. Inmarsat has set its target at £314m (US$500m) for five years after the new service is launched.
The move represents a significant upgrade for Inmarsat, which currently offers the only simultaneous global voice and 0.5Mbps data service available anywhere on the planet, using satellite terminals the size of laptops.
Telstra Next G Set To Be Blocked
The European Aeromobile group, controlled by Norway’s Telenor, has won the right to supply what appears to be a less than thrilling service for Australians who want to use mobile devices to access the Internet while on passenger aircraft. As part of the contract they will be allowed to block other carriers.
The Australian Communications and Media Authority late last week approved radiocommunications licensing arrangements that permit the use of mobile phones “and PDAs” on aircraft flying in Australian airspace.
The system will involve the use of onboard jammers to prevent connections to terrestrial services like Telstra’s Next G. The preferred option – currently offered only by Aeromobile – is for an onboard pico-cell connecting to an Inmarsat satellite.
That means international roaming charges – even though passengers never leave Australian airspace – on top of anything the airlines decide to charge for the service.
The Aeromobile service offers connections at GPRS speeds, hardly likely to appeal to laptop and iPad owners. In effect, any services will be largely limited to SMS and text messages – Australia’s airlines have, it’s understood, decided to ban voice calls, due to the understandable desire of fellow passengers for a bit of peace and quiet.
International airlines will have to abide by the Australian rules once they enter our airspace. Thus passengers on Emirates, and other airlines now adopting more sophisticated inflight broadband connections, seem likely to be told to switch off once they cross the coast.