By Liana B. Baker
Ligado Networks, the wireless satellite venture formerly known as LightSquared Inc that emerged from bankruptcy in 2015, is working with financial advisers to explore strategic alternatives, according to people familiar with the matter. The Reston, Virginia-based company has hired investment banks Goldman Sachs Group Inc (GS.N) and PJT Partners Inc PJT.T for its review, which will consider a potential sale or new investment among several options, the people said on Monday. Another possibility under consideration is finding a new equity investor through a private placement, the people added, asking not to be identified because the matter is not public.Representatives for Ligado, Goldman Sachs and PJT declined to comment. Ligado's move to explore options comes as the company awaits approval from the U.S. Federal Communications Commission (FCC) to allow it to use a portion of wireless airwaves in the so-called mid-band, which are spectrum frequencies that the company has said will help the telecom industry adopt 5G networks.
5G technology promises to be ten times to 100 times faster than current speeds.A spectrum crunch in the United States has driven up demand for these assets, as wireless providers such as AT&T Inc (T.N) and Verizon Communications Inc (VZ.N) are hungry for airwaves to help them expand their networks.Ligado's efforts to attract a new investment may be stymied by its large debt load, and uncertainty over the FCC's approval for some of its wireless airwaves, according to the sources.
Ligado exited bankruptcy in December 2015 with $1.5 billion in senior debt and $2.9 billion in junior debt, according to bankruptcy court documents. The company's junior debt has recently been trading well below face value, at about 79 cents on the dollar, according to Thomson Reuters data, indicating investor concerns about full repayment.
Fortress Investment Group LLC (FIG.N), Centerbridge Partners LP and JPMorgan Chase & Co (JPM.N) control Ligado after winning it in bankruptcy.Backed by hedge fund manager Philip Falcone, LightSquared originally planned to build a nationwide wireless network when the FCC proposed to suspend its plans in 2012, saying that the network it was building interfered with global positioning systems (GPS), included ones used by the military. This pushed it into bankruptcy in May 2012.It has since reached agreements with some of the GPS makers.Financial advisers for Ligado pegged the company's spectrum as worth between $4.5 billion and $6.8 billion during the bankruptcy, based on a certain method of valuing that type of asset, according to bankruptcy court papers. (Reporting by Liana B. Baker in San Francisco; Additional reporting by Jessica DiNapoli and Nick Brown in New York; Editing by Bernard Orr)
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Updated Date: Mar 14, 2017 04:15:05 IST