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LightSquared eyes court OK on $210.81 million replacement DIP loans
By Kali Hays
New York, Feb. 10 – LightSquared, Inc. is seeking approval of $210.81 million in new investor debtor-in-possession financing contained within its proposed plan of reorganization, according to a Feb. 9 motion with the U.S. Bankruptcy Court for the Southern District of New York.
The financing is comprised of tranche A new money loans totaling $80.31 million from “New Inc.” DIP lenders, tranche B loans totaling $89.5 million from the refinanced obligations and acquired DIP claims of Fortress Investment Group LLC and Centerbridge Partners LP, and tranche C loans totaling $41 million from the conversion of purchased DIP claims of SIG Holdings, Inc., an affiliate of LightSquared’s current lender, JPMorgan Chase.
If approved, the new investor loans will replace the company’s existing DIP facility set to mature on May 31, 2015, and carry LightSquared through its post-confirmation period.
Part of the obligations under the existing DIP facility will be paid through the conversion of the acquired DIP claims of Fortress, Centerbridge and SIG.
Proceeds from the tranche A loans will be used to repay all of the existing claims of MAST Capital Management, LLC that will not be acquired under the proposed plan.
The new financing will mature on the earlier of Dec. 30, 2015, the closing date of a sale of all or substantially all company assets or stock, the effective date of the reorganization plan and an acceleration of the new loans following an event of default, according to the motion.
Interest on the loans will be 17.5% payable in kind.
A hearing to consider the motion is scheduled for March 9.
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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