Covington satellite phone company Globalstar said Monday it has another two weeks to work out a deal with noteholders who wanted to surrender their securities and claim nearly $70.7 million.
Under the terms of the original offer, the noteholders had a right to put in claims for the money on Monday. Globalstar announced several weeks ago it didn’t have the funds to purchase the notes. The company failed to make a required $2 million interest payment on the notes Sunday.
In a statement, Globalstar said it is negotiating a restructuring arrangement with the noteholders.
Jay Monroe, Globalstar’s CEO, said the forbearance agreement “provides a runway” for a mutually agreeable restructuring.
Monroe said holders of 78 percent of the notes have agreed to the two-week delay.
The agreement not only keeps noteholders from claiming the money before April 15, but it prevents Globalstar from defaulting on its notes. The company warned if its obligations are accelerated, it could default on other debts, which have an aggregate amount of nearly $675 million.
Globalstar is negotiating a restructuring with its lenders. The company warns if a deal cannot be struck, it will explore other available restructuring and reorganizing alternatives.
Globalstar has faced financial difficulties while it launched a second generation of satellites for its phone network. The satellite launch was delayed and problems with the service kept Globalstar from bringing in new customers. The last batch of satellites was launched earlier this year and the full network should be on line by August.
Globalstar’s stock dropped 3 cents, or nearly 8 percent, Monday to 29 cents.