Globalstar agrees to exchange $2 million 5.75% convertibles for stock

By Jennifer Chiou

New York, Dec. 12 - Globalstar Inc. entered into an agreement to issue 1,937,735 common shares in exchange for $2 million of its 5.75% convertible senior notes due 2028, according to an 8-K filing with the Securities and Exchange Commission.

The notes were owned by institutional holders.

Globalstar said it did not receive any cash proceeds as a result of the exchange, adding that the notes will be retired and canceled.

As a result of the exchange, Globalstar will be entitled to cash proceeds from the existing escrow account for the benefit of noteholders.

The company said it entered into the agreement to reduce its debt and interest costs by $2.2 million, increase its equity and improve its balance sheet and liquidity.

Globalstar said it will consider entering into additional exchanges.

Milpitas, Calif.-based Globalstar is a provider of satellite voice and data services.

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