Globalstar To Receive Additional Financing

Satellite telecommunications firm Globalstar Telecommunications said on Monday that five of its founding partners will provide the company with further equity financing.

Under the terms of their agreements, Loral Space & Communications Ltd., Vodafone Group Plc, Qualcomm Inc.; Elsacom, and a France Telecom/Alcatel partnership will purchase 5.2 million shares of common stock of Globalstar for $56 million. Loral will purchase $12 million of this total. A sixth partner, ChinaSat, has indicated an intent to purchase an additional $12 million of Globalstar shares upon receipt of government approval.

The share purchases are based on a price of $10.71 per share. The transaction is expected to close by September 29. Based in New York, Globalstar said it will use the proceeds for general corporate purposes including capital expenditures, marketing and distribution of phones and services, and interest expense.