Globalstar
Allows Chase Bank Credit To Lapse
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Globalstar is allowing a US$250 million credit with Chase bank,
which expires June 30, to lapse. The company did not draw down any
of this credit, so it has nothing to pay back to Chase. The Chase
loan was largely guaranteed by Lockheed Martin . Spokesmen from
Chase and Globalstar both declined to comment on the loan.
Globalstar's main banker is Bank of America, which led
a US$500 million loan to the company in the middle of 1999.
Globalstar has drawn down $400 million of that loan. Loral, has a
39% equity stake in Globalstar and has pledged some of its
satellite assets as security for the Bank of America loan. It is
estimated Globalstar is burning about US$125 million of cash a
quarter.
Globalstar’s investors include: Loral, Qualcomm and Vodafone
AirTouch.
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