18 Aug 2010 12:00
INMARSAT RECEIVES PHASE 1 NOTICE FROM LIGHTSQUARED
London: 18th August 2010 - Inmarsat plc (LSE: ISAT), the leading provider of global mobile satellite communications services, today announced that it has received notice from LightSquared triggering Phase 1 of a Cooperation Agreement signed between Inmarsat and SkyTerra Communications, Inc. (now LightSquared).
Under the Cooperation Agreement originally signed in December 2007, Inmarsat and LightSquared agreed a plan to enable the re-banding and efficient reuse of L-band radio spectrum covering North America. The agreement was designed to increase the contiguous spectrum available to support the deployment of 4G ancillary terrestrial component ("ATC") services and to protect the continued deployment and growth of MSS activities in North America.
To implement Phase 1, Inmarsat will immediately begin a process of transition to a modified spectrum plan to increase spectrum contiguity. This process is expected to take 18 months and involve the cost of certain network modifications that Inmarsat will incur. During this process, LightSquared will make a series of payments to Inmarsat totalling $337.5m:
·; Upon delivery of the notice (the "trigger date"), an initial payment of $81.25m which has already been received by Inmarsat;
·; Following the initial payment, five instalment payments of $40.0m each to be paid every three months until the final $40.0m instalment 15 months from the trigger date; and,
·; At the Phase 1 completion date (targeted for 18 months following the trigger date), a final payment of $56.25m.
As a result of the Phase 1 notice, LightSquared will have a further Phase 2 option until 1 January 2013. Under the Phase 2 option Inmarsat will additionally support the LightSquared business plan in return for payments totalling $115m per annum. An implementation of Phase 2 by Inmarsat would involve a 30-month transition process.
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Investor Enquiries: Laura Furnival Inmarsat plc Telephone: +44 20 7728 1206 Email: laura_furnival@inmarsat.com
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John Warehand Inmarsat plc Telephone: +44 20 7728 1579 Email: john_warehand@inmarsat.com
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