Now that it has emerged from bankruptcy protection, LightSquared wants to get back to what it had planned to do before it got mired in restructuring nearly three years ago: use spectrum to provide wireless service to U.S. customers.
The company filed a petition with the FCC asking the agency to assign spectrum licenses that had been held by LightSquared to the newly restructured company. The new company will have $1.25 billion in working capital, according to the filing, and said it will use the funds to "make full use of its spectrum to provide existing and innovative services available to the public."
LightSquared said its emergence from bankruptcy will let it bring the company's "valuable spectrum resources and existing satellite and terrestrial networks to the marketplace. Post-consummation, LightSquared will be better equipped to continue to provide services to a wide range of private and public users--including the transport and energy industries, as well as first responders and federal government agencies--who depend on those services every day for safe, secure communication."
The FCC declined to comment, according to Bloomberg.
LightSquared initially launched with the goal of building a nationwide wireless LTE network that other companies could use in order to offer their own services to customers. The company signed up around 40 wholesale customers. However, LightSquared entered bankruptcy protection in May 2012 after the FCC revoked its conditional license to operate because of unresolved concerns that LightSquared's planned LTE-based network in the L-band would interfere with GPS receivers. LightSquared vigorously contested that move.
In the filing, LightSquared noted that several requests to avoid interference with GPS receivers by using different slices of LightSquared's spectrum remain pending at the FCC.
Interestingly, according to the filing, LightSquared's new board will include CEO Doug Smith as well as former Verizon Communications (NYSE: VZ) CEO Ivan Seidenberg and former FCC Chairman Reed Hundt.
Under the approved restructuring plan, LightSquared will be put in the hands of investors including Fortress Investment Group and Centerbridge Partners as well as a unit of JPMorgan Chase & Co. Philip Falcone's Harbinger Capital Partners hedge fund, which founded LightSquared and was its chief backer before the bankruptcy filing, will get a minority stake in the new company.
Dish Network (NASDAQ: DISH) Chairman Charlie Ergen's investment fund is not part of the new LightSquared. Ergen, LightSquared's largest creditor, agreed to back out of the company as part of its exit from bankruptcy protection, thanks to a $1.52 billion loan arranged by Jefferies & Co. that will cover the interest Ergen accrued on his $1 billion debt claim in LightSquared.
- see this FCC filing
- see this Bloomberg article
- see this Dow Jones article
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