TerreStar: Stalking horse Gamma has no competition in bid to buy assets for $1.38 billion

By Lisa Kerner

Charlotte, N.C., June 28 - TerreStar Networks Inc.'s June 30 auction for the sale of its assets was canceled as no initial incremental qualified bids were received by the June 27 deadline, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

A sale hearing will be held on July 7 to consider the approval of a $1.375 billion cash stalking horse agreement with Gamma Acquisition LLC, a unit of DISH Network Corp., which is also a party to the purchase agreement.

As previously reported Gamma Acquisition agreed to fund 97% of the purchase price before receipt of Federal Communications Commission or Industry Canada approval for the sale.

As a result, TerreStar said it will be able to seek court approval to retire its $1.1 billion of secured debt using sale proceeds, which would save the company roughly $14 million per month in interest payments over the next year.

Based in Reston, Va., TerreStar is a holding company with subsidiaries that operate satellite-based digital mobile communications systems. The company filed for bankruptcy on Oct. 19, 2010. The Chapter 11 case number is 10-15446.

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