Harbinger acquires more shares of SkyTerra in escrow agreement

By Jennifer Chiou

New York, Jan. 30 - SkyTerra Communications Inc. investors led by Harbinger Capital Partners Master Fund I, Ltd. and affiliates acquired 990,698 additional shares of SkyTerra through an escrow agreement, according to a 13D/A filing with the Securities and Exchange Commission.

Wells Fargo Bank, NA was the escrow agent.

The company said that 200,500 of the additional shares were purchased on Jan. 28 at an average price per share of $1.428 while 790,198 of the shares were bought on Jan. 29 at $1.86 per share.

According to the filing, pending the receipt of approval from the Federal Communications Commission of Harbinger's pending application seeking authority to own up to 100% of the issued and outstanding stock of SkyTerra, there are limitations on the number of shares that Harbinger and its affiliates may acquire.

Harbinger and affiliates hold a 63.8% stake in SkyTerra, the filing said.

On Jan. 7, SkyTerra amended its securities purchase agreement with affiliates of Harbinger. The original agreement, announced July 25, 2008, provided that Harbinger would invest up to $500 million in four tranches of debt financing to fund SkyTerra's operations through the third quarter of 2010.

As already reported, under the amended agreement, the second tranche of senior notes due 2013 increases the interest rate to 18% from 16%. The agreement also allows the number of warrants issued to Harbinger to increase to 32.5 million from 25 million. Of the total, warrants for 21.25 million of SkyTerra's common stock will be issued on April 1. SkyTerra will also issue warrants for 3.75 million shares of common stock at the fourth closing, expected Jan. 4, 2010. The exercise price is $0.01.

SkyTerra is a Reston, Va.-based provider of mobile wireless voice and data services primarily for public safety, security, fleet management and asset tracking in the United States and Canada.

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