Report: TerreStar hires restructuring advisers

TerreStar, which is in the midst of launching an all-IP, integrated satellite-terrestrial network, is working with advisers from Blackstone Group to try to avoid filing for bankruptcy. The company said in a regulatory filing Aug. 6 that it may have to file for Chapter 11 bankruptcy if it is unable to restructure its debt.

According to Reuters, the firm is working with its major creditors, including Harbinger Capital Partners, a New York-based hedge fund that also owns startup LightSquared. Harbinger owns $150 million of TerreStar's debt, which is estimated to total nearly $1 billion. Representatives from TerreStar and Harbinger declined to comment.

Harbinger has been in the news recently talking about LightSquared and its plans to use terrestrial and MSS spectrum to build a nationwide LTE network that will offer wholesale mobile broadband services. LightSquared has raised $1.75 billion to build its network. LightSquared currently has lease arrangements with TerreStar.

Last July, AT&T Mobility (NYSE:T) inked a deal with TerreStar to resell satellite services and phones from TerreStar. Initially, AT&T said it would resell the service to local, state and federal governments.

For more:
- see this Reuters article

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LightSquared: Can it live up to its wholesale aspirations?
AT&T will resell service from satellite provider
TerreStar will launch satellite July 1
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Article updated Aug. 17 to reflect that TerreStar and Harbinger declined to comment.

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