LightSquared equityholder Harbinger amends plan stock treatment

By Caroline Salls

Pittsburgh, Sept. 30 – LightSquared Inc. equityholder Harbinger Capital Partners, LLC filed an amended plan of reorganization for the company’s LightSquared Inc. debtors on Monday with the U.S. Bankruptcy Court for the Southern District of New York that changes the proposed treatment for existing preferred and common stock interests.

Under the amended plan, holders of existing preferred interests will receive 8% of One Dot Six debtor common shares and 8% of LP debtor equity interests or proceeds distributed on account thereof, until all other existing LightSquared Inc. debtor preferred interests are paid in full. The LP interest distribution is new to the amended plan.

SIG Holdings, Inc. will receive 100% of LightSquared Inc. common shares and 22% of LP equity surplus interests or related proceeds in exchange for its existing preferred interests.

Meanwhile, holders of common interests, who were previously scheduled to receive no distribution, will now receive a share of 70% of the LP equity surplus interests or related proceeds until all preferred interests are paid in full and 100% of the LP surplus interests after the preferred interests are paid in full.

As previously reported, to fund the capital requirements of its plan, Harbinger said it would provide $100 million of new equity financing, and SIG affiliate JPMorgan Chase would provide $160 million of new equity.

Harbinger said its plan would also be funded by $40 million of new subordinated debt.

The balance of the capital requirements would be obtained through a new first-lien debt facility.

In August, Harbinger and LightSquared both received court approval to solicit votes on the plans they submitted

Creditor treatment

Specific creditor treatment under the Harbinger plan would include:

• Administrative claims, debtor-in-possession facility claims, priority tax claims and other priority claims would be paid in full in cash;

• Holders of other secured claims would either be paid in full in cash or receive the collateral securing their claims;

• Holders of pre-bankruptcy LightSquared Inc. facility non-subordinated claims would have $200 million of their claims purchased by SIG. The acquired claims would be converted into a new junior DIP tranche facility on a dollar-for-dollar basis. The balance of the claims would be paid in cash;

• Holders of pre-bankruptcy facility subordinated claims would receive 100% of the common shares in the One Dot Four and TVCC Intermediate Corp. debtor common shares, 70% of One Dot Six common shares and One Dot Six preferred shares with an original stated principal value of $75 million;

• Holders of general unsecured claims would be paid in full in cash, plus any accrued interest;

• Holders of insider general unsecured claims would receive no distribution;

• Holders of existing common stock would receive a share of LP debtor surplus interests;

• Holders of existing preferred shares would receive 8% of One Dot Six common shares and 8% of LP debtor surplus interests or related proceeds; and

• Intercompany interests and intercompany claims would be reinstated.

LightSquared is a Reston, Va.-based wholesale-only 4G-LTE network integrated with satellite coverage. The company filed for bankruptcy on May 14, 2012 under Chapter 11 case number 12-12080.

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