Globalstar to use portion of Apple cash prepayments for debt repayment

In a regulatory filing, Globalstar (GSAT) notes that on October 29, the company and customer Apple (AAPL) agreed to make certain amendments to the Services Agreements and entered into other related agreements for Globalstar to deliver expanded services to customer over a new mobile satellite services, or “MSS,” network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing. “The Updated Services Agreements provide that Customer will make cash prepayments to the Company, including for approved capital expenditures in connection with the Extended MSS Network. These prepayments consist of: (1) an infrastructure prepayment (the “Infrastructure Prepayment”) of up to $1.1 billion as further described under Item 2.03 below, which is to be funded over the construction period on a quarterly basis, the proceeds of which the Globalstar SPE will use, together with the proceeds from the sale of the Customer Class B Units described below to pay amounts due for the Extended MSS Network (including, but not limited to, construction and launch costs) and (2) an amount necessary for the Company to retire at closing its outstanding 13.00% Senior Notes due 2029 (the “2029 Notes”) as further described under Item 1.02 below (the “Current Debt Repayment”). The Infrastructure Prepayment and the funds used for the Current Debt Repayment are contained within one prepayment agreement,” the filing stated. “The Company will use a portion of the cash proceeds received from Customer, as described in Item 1.01 above, for the Current Debt Repayment, consisting of the aggregate principal amount outstanding of the 2029 Notes of $219 million plus make-whole fees of $13 million, pursuant to the terms of the 2029 Notes, and to discharge the related Indenture, dated as of March 31, 2023, by and among the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee,” the filing noted.