Settlement to result in, among other items, appointment of two new
Minority Directors plus an additional independent board member,
establishment of a Strategic Review Committee, requirement of majority
of independent stockholders vote on related party transactions and
commitment to purchase a pro rata share and provide backstop support for
an equity offering
COVINGTON, La.--(BUSINESS WIRE)--Dec. 17, 2018--
Globalstar, Inc. (NYSE American: GSAT) (“the Company”), together with
Mudrick Capital Management, L.P. (“Mudrick Capital”) and Warlander Asset
Management, LP (“Warlander”) and all other litigation parties are
pleased to announce that the parties have entered into a Settlement
Agreement related to the litigation brought by Mudrick Capital and
Warlander in Delaware Chancery Court involving Globalstar and certain of
its directors, officers and employees.
As a result of the Settlement Agreement, the parties have agreed to the
addition of three new seasoned telecom executives to the Company’s Board
of Directors: Keith Cowan, Ben Wolff and Mike Lovett. These new
directors will be immediately appointed to the Globalstar Board of
Directors to fill three vacancies left by existing board members who
support this settlement and volunteered to step down from their
positions. Messrs. Cowan and Wolff will be designated the “Minority
Directors” and at the end of Minority Directors’ terms such seats shall
be filled by candidates elected by a plurality vote of minority
stockholders. Both Minority Directors shall be appointed to a new,
standing Strategic Review Committee, and one Minority Director will be
appointed to each of the Compensation Committee and the Nominating &
Corporate Governance Committee. Additionally, Timothy Taylor, Vice
President of Thermo and Globalstar’s Vice President of Finance, Business
Operations and Strategy will join the board to fill a vacancy left by a
fourth board member retiring from his position on the board.
The Strategic Review Committee will be comprised of Minority Directors
Ben Wolff, Keith Cowan, and two other directors, William Hasler and
Timothy Taylor. The Strategic Review Committee’s first order of business
shall be to assess financing options for Globalstar. Furthermore, the
Strategic Review Committee will have exclusive authority for the review
and oversight of certain events and its approval shall be necessary for
events including but not limited to: (i) any acquisition by Thermo
and/or any Jay Monroe affiliated party or person of additional
newly-issued securities of Globalstar, subject to certain exceptions;
(ii) any extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Globalstar or any of its
subsidiaries; (iii) any sale or transfer of a material amount of assets
of Globalstar or any sale or transfer of assets of any of its
subsidiaries which are material to Globalstar; (iv) any further change
in the Board of Directors of Globalstar, including any plans or
proposals to change the number or term of directors or to fill any
vacancies on the Board, provided that only elections of Minority
Directors shall be within the authority of the Strategic Review
Committee; (v) any material change in the present capitalization or
dividend policy of Globalstar; (vi) any transaction between the Company
and Thermo or one or more of its affiliates that has a value in excess
of $250,000 (subject to certain exceptions) and (vii) any other material
changes in Globalstar’s lines of business or corporate structure. The
Globalstar Certificate of Incorporation will be amended to establish the
Strategic Review Committee which shall remain in place until such time
as Thermo and its affiliates no longer beneficially own 45% or more of
Globalstar’s outstanding stock. Additionally, the Certificate of
Incorporation and Bylaws will be amended to require a majority of
independent stockholders to vote on any related party transaction
between Globalstar and Jay Monroe, or Thermo and its and their
respective affiliates, with a value of $5 million or more (subject to
certain exceptions).
Within five business days of an event of (i) refinancing of 85% of
Globalstar’s bank debt, (ii) refinancing of a minimum of $150 million of
Globalstar’s bank debt with a minimum two year extension of maturity on
the remaining balance, or (iii) an extension of maturity or amortization
holiday on such debt of two years or more, Thermo has agreed to convert
all of its outstanding subordinated debt into Globalstar common equity
at the contractual conversion price under its subordinated loan
agreement. If triggered, this conversion will have the additional
benefit of immediately reducing the Company’s debt by at least $116
million.
The Settlement Agreement requires Globalstar to conduct an undiscounted
equity offering (less any underwriting discount) of its common stock to
qualified and readily identifiable Globalstar stockholders on a pro rata
basis, based on ownership, in an amount recommended by Globalstar’s
management of not more than $60 million, exclusive of any funds raised
pursuant to an underwriter option. Thermo, Mudrick Capital and Warlander
have agreed to purchase their pro rata share of any such offering and to
backstop the balance offered to, but not purchased by, other Globalstar
stockholders, on a pro rata basis based on their respective ownerships
of Globalstar’s common stock. The settlement and any related fee award
is subject to confirmatory diligence and confirmation and approval by
the Delaware Chancery Court.
This press release shall not constitute an offer to sell or the
solicitation of any offer to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
Jay Monroe, Executive Chairman of Globalstar, commented, “Globalstar and
Thermo are pleased with this outcome and happy to put this litigation
behind us. We would like to thank the outgoing directors for their many
years of service to the Company and would like to welcome Ben, Keith and
Mike to the Globalstar team. In the last week, we have spent a
significant amount of time with all three of them and believe that they
will be excellent board members, especially given their deep telecom and
spectrum experience which is so important to our future plans.”
Mr. Monroe continued, “We are pleased to have reached agreement with
Mudrick Capital and Warlander and appreciate their support moving
forward. Litigation is costly and time consuming, and we prefer to focus
our time and resources on moving towards value realization which this
settlement frees us up to do. We continue to believe in Globalstar’s
potential and welcome the new directors to help us realize it. Our
management team looks forward to working with the Strategic Review
Committee and the full Board of Directors on the continued thoughtful
examination of our business.”
Jason Mudrick, the President and Chief Investment Officer of Mudrick
Capital and Eric Cole, Chief Executive Officer of Warlander, together
issued the following statement: “This settlement reflects a constructive
dialogue with the Globalstar team and we look forward to continuing our
collaborative relationship in order to further enhance shareholder
value. We continue to strongly believe in the value of Globalstar’s
assets and its ability to monetize those assets. The details of this
settlement - including the minority shareholder provisions such as the
new Minority Directors, a new independent director, and the Strategic
Review Committee - provide us with additional confidence for the future
of this Company. We are also excited to have Ben, Keith and Mike join
the Globalstar board. Given their expertise in the telecom sector and
with successful spectrum transactions, we believe they will add
tremendous value immediately. We are confident that the Settlement
heralds a new era of sustainable value creation for the benefit of all
of Globalstar’s stockholders.”
Ben Wolff, Keith Cowan and Mike Lovett jointly issued the following
statement: “We believe Globalstar has a unique collection of assets and
are excited to join the Board of Directors. We look forward to working
with the rest of the Board and the management team to enhance value for
all stakeholders.”
About Globalstar’s New Minority and Independent Directors
Keith Cowan
Since January 2013, Mr. Cowan has served as the Chief Executive Officer
of Cowan Consulting Corporation LLC, a privately held company that
manages investments and provides strategic planning and board advisory
services. From July 2007 to January 2013, Mr. Cowan was the President of
Strategic Planning and Corporate Initiatives at Sprint Corporation, with
responsibilities that included developing the long-term strategic plan
for Sprint, restructuring and managing Clearwire Corporation as a public
company consortium including Sprint, Comcast, Time Warner Cable, Intel,
Google, and Bright House Networks, and managing the sale of control of
Sprint to Softbank. From May 1996 to January 2007, Mr. Cowan held a
variety of roles at BellSouth Corporation, which subsequently merged
with AT&T, including Chief Development Officer, Chief Network Field
Officer and President of Marketing and Product Management. Mr. Cowan’s
time at BellSouth included his instrumental role in the creation and
governance of Cingular Wireless and responsibility for entering,
governing and exiting many of BellSouth’s international wireless
partnerships in Europe, the Middle East, South America, and Asia.
Mr. Cowan has served as a board member of over a dozen private
companies, two public companies, and numerous not-for-profit and civic
organizations, including, currently, his service as Chairman of the
Board of Aegex Technologies, CX Technologies (ENGAGEcx), Cobra Legal
Solutions and Venadar LLC.
Ben Wolff
Mr. Wolff serves as the Chairman and CEO of Sarcos Robotics, a global
leader in mobile, dexterous, tele-operated robots. Mr. Wolff served from
2009 to 2014 as Chief Executive Officer, President and Chairman at
satellite communications firm ICO Global Communications which was
subsequently renamed Pendrell Corp. In 2003, Mr. Wolff co-founded
Clearwire Corporation, where he served as President, CEO and
Co-Chairman. Mr. Wolff oversaw the growth of the company to more than $1
billion in revenues and 3,500 employees, raising more than $12 billion
in debt and equity financing during his tenure. Clearwire was sold to
Sprint in 2013 for more than $14 billion. From 2004 to 2011, Mr. Wolff
also served as President of Eagle River Investments, a telecom and
technology focused private equity and venture capital fund, and as a
member of the board of directors of various public and private Eagle
River portfolio companies.
Michael Lovett
Since October 2012, Mr. Lovett has served as managing partner of Eagle
River Partners LLC, a privately held investment and advisory company.
Until April 2012, Mr. Lovett served as the CEO and President of Charter
Communications. Previously he was COO and joined Charter in August 2003
as Senior Vice President of Operations. Mr. Lovett’s career in cable and
telecom related companies began in 1980 with Centel Communications where
he held a number of positions in operations. He was with Jones
Intercable Inc. from 1989 to 1999 rising to Senior Vice President with
responsibility for operations in nine states; and AT&T Broadband as
Regional Vice President of Operations from June 1999 to November 2000.
He served as Executive Vice President of Operations for OneSecure Inc. a
managed security service company providing management/monitoring of
firewalls and virtual private networks from November 2000 to December
2001; and was Chief Operating Officer for Voyant Technologies Inc. a
voice conferencing hardware/software solutions provider in Denver from
December 2001 to August 2003.
About Globalstar
Globalstar is a leading provider of mobile satellite voice and data
services. Customers around the world in industries such as government,
emergency management, marine, logging, oil & gas and outdoor recreation
rely on Globalstar to conduct business smarter and faster, maintain
peace of mind and access emergency personnel. Globalstar data solutions
are ideal for various asset and personal tracking, data monitoring, M2M
and IoT applications. The Company's products include mobile and fixed
satellite telephones, the innovative Sat-Fi satellite hotspot, Simplex
and Duplex satellite data modems, tracking devices and flexible service
packages.
About Mudrick Capital
Mudrick Capital Management, L.P. is an SEC-registered investment adviser
specializing in distressed credit and deep value event driven investing.
Mudrick Capital manages capital for a diverse group of sophisticated
institutions and individuals, including endowments, foundations,
insurance companies, private banks, fund-of-funds, pensions, family
offices and high net worth individuals.
About Warlander Asset Management
Founded in 2015, Warlander Asset Management, LP is an SEC-registered
investment adviser that specializes in long/short, credit-oriented
investments, focused on opportunistically investing across the full
spectrum of global fixed income and credit-sensitive equities.
This press release contains forward-looking statements within the
meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as “believe,” “expect,” “intend,” “project,” “anticipate,”
“position,” and other similar terms and phrases, including references to
assumptions and forecasts of future results. Forward-looking statements
are not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors which may cause the actual
results to differ materially from those anticipated at the time the
forward-looking statements are made. These risks include, but are not
limited to the risk that the anticipated settlement may be terminated,
the consummation of the financing and those risks and uncertainties
associated with the Company’s business described from time to time in
its filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K filed on February 23, 2018. Although the
Company believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, the Company can give
no assurance that the expectations will be attained or that any
deviation will not be material. All information in this release is as of
the date of this release, and the Company undertakes no obligation to
update any forward-looking statement to conform the statement to actual
results or changes in its expectations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181217005352/en/
Source: Globalstar, Inc.
Globalstar contact information:
Samantha DeCastro
[email protected]
