Reston, VA, United States (4E) – Philip Falcone-owned LightSquared Inc. unveiled a new reorganization plan that could allow the wireless broadband company to become a stand-alone firm following its exit from bankruptcy.
LightSquared proposed a $2.65bn restructuring supported by Fortress Investment Group, according to a filing with the U.S. Bankruptcy Court in Manhattan on Friday. Unlike a previous plan that was backed by Fortress, the latest proposal does not involve the Federal Communications Commission (FCC) modifying the licenses of LightSquared.
In May 2012, the Reston, Virginia-based LightSquared filed for bankruptcy following FCC decision to block the company’s service as it might interfere with equipment for global-positioning-system navigation.
LightSquared’s disclosure statement said that there was strong consensus for the plan and had huge support from the company’s major stakeholders.
Under the proposed reorganization, which is lesser than the $4bn plan that Fortress had earlier abandoned, the company takes out a $1.65bn loan during bankruptcy proceedings and another $1bn loan to finance the company as soon as it leaves Chapter 11. Lesser funding is required in the new proposal because LightSquared would exit bankruptcy proceedings much sooner than under the previous plan.
Phil Falcone’s Harbinger Capital Partners, which had battled a takeover bid from Dish Network Corp., currently owns a controlling stake at LightSquared and would participate in the new financing scheme.