Globalstar Acquired by Thermo Capital Partners

Globalstar Acquired by Thermo Capital Partners

(15 April 2004) Globalstar has completed its financial restructuring following the formal acquisition of its main business operations and assets by Thermo Capital Partners LLC.

Thermo now owns 81.25% of a newly-formed Globalstar company in exchange for an investment of US$ 43 million, with the remainder of the equity to be distributed to the creditors of the original Globalstar company - Globalstar, L.P. (GLP). With this acquisition, Globalstar's main business has now effectively exited from the bankruptcy process.

Thermo announced several new business initiatives and strategies, aimed at ramping up the company's growth in the months and years ahead. These include:

Spare satellite launch plans: Planning has now begun to prepare the eight spare satellites that Globalstar is currently holding in ground storage for launch into orbit, possibly in late 2005 or early 2006.
Enhanced Caribbean Service: A final site review is now underway for a new Globalstar gateway in Florida, and the company hopes to enter into a formal lease agreement for the site in the weeks ahead, with the gateway - valued at several million dollars - to be constructed during 2004. This follows the company's earlier decision to add a fourth antenna at the company's gateway at Las Palmas, Puerto Rico, with installation to be completed later this month. Together these two programs will provide higher quality coverage and greater system capacity across the Caribbean where Globalstar service has been exceptionally popular.
Introduction of New Products and Services: Globalstar will resume or accelerate several product development programs that had been slowed down or suspended during the company's restructuring. Globalstar expects the first new product - fax capability - to be introduced commercially later this month.
Expansion of Data Offerings: Building on Globalstar's existing portfolio of data services and technology, the company has now begun offering data services tailored for specific industries, such as maritime, homeland security, oil and gas extraction and transport, and more. At the same time, new data services are also under development, with a new data compression service scheduled for commercial launch in the weeks ahead.
Alaskan Gateway Planning: Thermo has approved work to proceed on site selection for a new Globalstar gateway in Alaska, intended to serve virtually the entire state of Alaska as well as offshore regions in the North Pacific and Bering Strait where commercial cargo and fishing vessels have shown strong interest in the company's service.

Underlying these initiatives is a new business plan that Globalstar and Thermo have been developing over the past several months, centring on re-aligning the company's resources to bring greater emphasis on addressing customer needs, particularly in the company's key markets such as oil and gas, maritime, defence, and transportation. Furthermore, Globalstar has already recruited new professional staff who will bring new expertise and skills to the company's sales and marketing departments and will be hiring additional professionals to further augment its sales efforts.

Details of the Acquisition Agreement:

In December 2003, Thermo entered into a preliminary agreement to acquire Globalstar, subject to a number of conditions, including regulatory approval and the successful completion of several settlement and technical agreements. Regulatory approval was granted in early March, and the US Bankruptcy Court approved the last of the required agreements on March 31, allowing Thermo to formally conclude the acquisition.

The acquisition process centred around the establishment of a new Globalstar company which subsequently assumed ownership of essentially all of the assets and business operations formerly owned by GLP. Employees of GLP and its world-wide subsidiaries have also been transferred to the new company. As a result, GLP no longer has any significant operations and is expected to be wound up in the weeks ahead.

Globalstar service will continue to be marketed and sold under the Globalstar name, and the company's service provider partners around the world will continue to support customers as usual, with newer products and services expected to be introduced in the future.

(source: Globalstar)