By Stephanie N. Rotondo
Portland, Ore., Jan. 7 - SkyTerra Communications Inc. amended its securities purchase agreement with affiliates of Harbinger Capital Partners, the company said in a filing with the Securities and Exchange Commission Wednesday.
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. The first of the four tranches closed on Wednesday.
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.
As part of the agreement, Harbinger agreed that some of the conditions to closing of the second tranche, scheduled for April 1, will by satisfied on delivery of a certificate by SkyTerra. The change gives greater certainty of funding, the company said.
Harbinger holds a 48.43% stake in SkyTerra.
Morgan Stanley acted as financial advisor for the transaction.
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.
| Issuer: | SkyTerra Communications Inc.
|
| Security description: | Senior notes
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| Amount: | Up to $500 million in four tranches
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| Coupon: | 18%
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| Maturity: | 2013
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| Warrants: | 32.5 million at $0.01 per share
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| Settlement date: | Jan. 7 (first tranche)
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| Distribution: | Private placement
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| Investors: | Harbinger Capital Partners and affiliates
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