LightSquared stalking horse bidders receive approval for protections

By Caroline Salls

Pittsburgh, Sept. 25 - An independent informal group of LightSquared LP secured lenders and Mast Spectrum Acquisition Co., LLC received court approval of bid protections related to proposed sales of LightSquared debtor assets, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

U.S. Bank NA and Mast Capital Management, LLC entity Mast Spectrum Acquisition submitted a stalking horse credit bid for the assets of debtors LightSquared Inc. and One Dot Six Corp.

On Aug. 28, the lender group asked the court for permission to conduct an auction for some of the assets of LightSquared LP and its affiliated debtors.

The lenders said the debtors received an unsolicited $2 billion cash offer from DISH Network Corp. wholly owned subsidiary L-Band Acquisition, LLC on May 15 to purchase some assets of LightSquared and its subsidiaries and assume some of their obligations.

The lender group said it negotiated with L-Band following expiration of the debtors' exclusive periods, resulting in the purchase offer being revised to increase the cash portion of the bid by more than $220 million, to $2.22 billion, and resulting in the buyer committing to assume obligations arising under Inmarsat and Boeing contracts.

The lender group said it estimates the transaction to be valued in excess of $3.5 billion.

Under the bid protections approved on Wednesday, the LP debtors were directed to reimburse L-Band for up to $2 million of its sale-related costs and expenses.

In addition, all costs, fees and expenses of Mast Spectrum Acquisition Co., LLC and U.S. Bank associated with Mast Spectrum's proposed stalking horse bid for the assets of LightSquared Inc. and debtor One Dot Six Corp. will be allowed as administrative expenses and payable in accordance with the company's debtor-in-possession financing order.

The approved protections also include a no-shop provision under which the LightSquared debtors cannot solicit or initiate any inquiries regarding the submission of any sale transaction, participate in any discussions or negotiations regarding any sale transaction or enter into any agreement for or approve any sale transaction through Sept. 30.

The offers submitted by L-Band and Mast are not subject to the no-shop provision.

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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