TerreStar satellite launch, 2008 development projects funded through recent capital-raise transactions

By Jennifer Lanning Drey

Portland, Ore., March 13 - TerreStar Corp.'s operations are fully funded through the launch of its TerreStar-1 satellite following recent capital-raise activities that brought the company a total of $376 million, Neil Hazard, TerreStar's chief financial officer, said Thursday during a presentation at the Lehman Brothers 2008 High Yield Bond and Syndicated Loan Conference in Orlando, Fla.

The new capital will also provide all the necessary funding needed in 2008 for the company to begin development of mobile handset/chipsets and to complete the TerreStar-2 satellite, which is under construction. The funding will also cover the initial expenses related to the build-out of the company's planned terrestrial network, which it will complete as customer demand arises.

"The objectives of these transactions were primarily funding ourselves for 2008 and beyond," Hazard said.

The financing transactions included a $300 million private placement of exchangeable notes and the sale of 14.4 million shares of SkyTerra Communications stock for $76 million.

Hazard said the capital raise fits with the company's philosophy for its capital plan, which focuses on raising money in increments as it becomes needed.

TerreStar estimates its operating expenditures to be $480 million to $500 million through Sept. 30, 2008.

TerreStar, formerly Motient Corp., is a Lincolnshire, Ill., mobile satellite services company.

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