8-KMaterial Agreements

Globalstar, Inc. 8-K Report, Material Agreement (Dec 28, 2007)

Filed December 28, 2007For Securities:GSAT

Summary

Globalstar, Inc. (GSAT) has filed an 8-K report detailing a material definitive agreement entered into on December 21, 2007. The company's wholly-owned subsidiary will acquire all partnership interests of Loral/DASA Globalstar, L.P. (LDG), which operates as Globalstar's independent gateway operator in Brazil and owns three gateways there. This acquisition is set to be paid for with up to $6.5 million in Globalstar's common stock. This transaction represents a strategic move by Globalstar to bring its Brazilian gateway operations in-house, potentially streamlining operations and improving control over a key market. The purchase price is subject to adjustments based on outstanding service fees owed by LDG to Globalstar, which could reduce the effective cash outlay. The closing of this deal is contingent upon regulatory approvals, including from the Brazilian telecommunications agency, and the SEC registration of the shares to be issued.

Key Highlights

  • 1Globalstar, Inc. entered into a material definitive agreement on December 21, 2007.
  • 2The agreement involves the acquisition of Loral/DASA Globalstar, L.P. (LDG) and its associated subsidiaries by a Globalstar wholly-owned subsidiary.
  • 3LDG serves as Globalstar's independent gateway operator in Brazil and owns three gateways in the country.
  • 4The acquisition price is up to $6.5 million payable in Globalstar's Common Stock.
  • 5The purchase price may be reduced by the amount of outstanding service fees owed by LDG to Globalstar.
  • 6Closing of the transaction is contingent on regulatory approvals, including from the Brazilian telecommunications agency.
  • 7Registration of the shares to be issued with the U.S. Securities and Exchange Commission is also a condition for closing.

Frequently Asked Questions

The main purpose of this 8-K filing is to report a material definitive agreement entered into by Globalstar, Inc. on December 21, 2007, concerning the acquisition of its Brazilian gateway operator, Loral/DASA Globalstar, L.P. (LDG).

Globalstar will pay for the acquisition of LDG using up to $6.5 million worth of its own Common Stock. The final amount may be reduced by any outstanding service fees owed by LDG to Globalstar.

The key conditions for the acquisition to be completed include obtaining approval from the Brazilian telecommunications agency and the registration of the shares to be issued for the transaction with the U.S. Securities and Exchange Commission.

Acquiring LDG means Globalstar will bring its independent gateway operations in Brazil in-house. This could lead to greater control over its infrastructure in a key market, potentially improving operational efficiency and service delivery.