Summary
Globalstar, Inc. (GSAT) has filed an 8-K report detailing a significant settlement agreement with Thales Alenia Space France (Thales) regarding prior commercial disputes and an arbitration award. The company has agreed to purchase six additional second-generation satellites from Thales for approximately €25 million each, with payments spread over three years post-manufacturing commencement. This agreement is contingent upon Globalstar securing necessary third-party financing, including from the Thermo companies, and entering into a formal commercial contract. The settlement also involves a substantial reduction of an arbitration award. Globalstar will pay one-third of the award to Thales, and Thales will waive the remaining two-thirds and all interest upon receipt of this payment and certain releases. The parties will also seek clarification on a €3.864 million claim related to Phase 2 satellites, with potential deferral or escrow arrangements for this amount. The agreement includes termination clauses if the new contract isn't signed by February 28, 2013, and requires consent under Globalstar's Facility Agreement.
Key Highlights
- 1Globalstar and Thales have reached an agreement to settle prior commercial disputes and an arbitration award.
- 2Globalstar plans to purchase six additional second-generation satellites from Thales at a fixed price of approximately €25 million per satellite.
- 3Payment for the new satellites will be spread over approximately three years after manufacturing begins.
- 4The settlement hinges on Globalstar securing necessary third-party financing, notably from the Thermo companies.
- 5Globalstar will pay one-third of the arbitration award, with Thales waiving the remaining two-thirds and interest upon payment and releases.
- 6A €3.864 million claim by Thales for Phase 2 satellites will be subject to clarification from the arbitration panel, with potential for deferred payment or escrow.
- 7The agreement can be terminated if a new commercial contract is not signed by February 28, 2013.