What is the primary purpose of the Third Global Amendment and Restatement Agreement (2017 GARA)?

The primary purpose of the 2017 GARA is to restructure Globalstar's debt obligations, providing financial flexibility by deferring certain covenants and mandatory payments, while requiring substantial equity raises to strengthen the balance sheet and ensure debt repayment.

What are the key financial relief measures provided by the amendment?

The amendment defers certain financial covenants until the end of 2018, eliminates the need to redeem 8% Notes, and postpones mandatory prepayments from equity raises until January 2020. It also revises the definition of the DSRA Required Balance after October 2017.

What are Globalstar's equity raising obligations under this agreement?

Globalstar is obligated to raise at least $159 million in equity. A portion of this, approximately $33 million (Stage I), was raised by June 30, 2017, through a stock purchase agreement. The remaining amount (Stage II) must be raised by October 30, 2017. Furthermore, 80% of all equity proceeds raised through December 31, 2019, will be deposited into a restricted account for debt obligations.

How did Globalstar fund the immediate obligations due on June 30, 2017?

Globalstar raised approximately $33 million through a Common Stock Purchase Agreement with Thermo Funding II LLC. This amount satisfied the Stage I Equity Raise requirement and covered restructuring fees, insurance premiums, and debt service due on that date.

GSAT 8-K: Material Agreements & Securities & Listing

Summary

Globalstar, Inc. (GSAT) has entered into a Third Global Amendment and Restatement Agreement (2017 GARA) with its lenders, significantly restructuring its debt obligations. Key changes include the deferral of certain financial covenants until the end of 2018 and the extension of equity cure contribution rights until the end of 2019. Importantly, the company has also eliminated the requirement to redeem its 8% Notes and deferred mandatory prepayments from equity raises until January 1, 2020. These amendments are contingent on Globalstar raising at least $159 million in equity over two stages, with a substantial portion of future equity proceeds restricted for debt payment. As part of the Stage I Equity Raise, Globalstar secured approximately $33 million through a Common Stock Purchase Agreement with Thermo Funding II LLC, selling shares at a discount. This immediate funding was used to cover restructuring fees, insurance premiums, and debt service due on June 30, 2017. The company must complete the Stage II Equity Raise, totaling the remainder of the $159 million, by October 30, 2017. Additionally, capital expenditures related to spectrum rights are capped, and 80% of equity proceeds raised through December 2019 will be held in a restricted account for facility agreement obligations, demonstrating a clear focus on debt deleveraging.

Key Highlights

1Globalstar entered into a Third Global Amendment and Restatement Agreement (2017 GARA) on June 30, 2017, modifying its existing credit facility.
2Key financial covenants are deferred until the measurement period ending December 31, 2018.
3The requirement to redeem 8% Notes in full has been eliminated.
4Mandatory prepayments from qualifying equity raises are deferred until January 1, 2020.
5Globalstar must raise at least $159 million in equity, with 80% of future equity proceeds restricted for debt payments through December 31, 2019.
6Approximately $33 million was raised through a Common Stock Purchase Agreement with Thermo Funding II LLC to meet Stage I equity raise requirements and immediate obligations.
7Capital expenditures related to spectrum rights are capped at $20 million or 20% of equity proceeds raised between January 1, 2017, and December 31, 2019.

Globalstar, Inc. 8-K Report, Material Agreement (Jul 7, 2017)

Summary

Key Highlights

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