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Falcone gets time to restructure LightSquared
02 May 2012
Creditors grant one-week extension to waiver on covenants attached to $1.6bn of LightSquared debt
Hedge fund manager Philip Falcone, whose Harbinger Capital has invested around $3 billion in the LightSquared satellite venture, has been given more time to restructure the project, by debt holders.
Creditors have agreed on a one-week extension to a waiver on covenants attached to $1.6 billion of LightSquared debt that expired on April 30.
The company is still negotiating for a longer-term extension to avoid having to file for bankruptcy, reports the Financial Times, citing an unnamed source.
A deal could involve an agreement not to put LightSquared into voluntary bankruptcy later, and may even call for Falcone to step down as the “face of the venture”, but Falcone believes he can seek Chapter 11 bankruptcy protection from creditors and continue to control LightSquared thanks to the value of its radio spectrum.
Most of the cash injected into the project has been invested on the radio spectrum required to provide a wholesale wireless service to commercial customers, which would offer services to consumers, competing with companies such as AT&T Mobility and Verizon Wireless. GTB
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