Reston, VA-based satellite communications company, Ligado Networks, has entered into a comprehensive Restructuring Support Agreement with a majority of its existing creditors for an overall balance sheet restructuring. The Supporting Creditors hold approximately 88 percent of Ligado’s funded indebtedness, and the Restructuring provides for the conversion of approximately $7.8 billion of existing debt into new preferred equity along with the preservation of the existing interests in the capital structure below the new preferred equity.
To implement the Restructuring, Ligado has commenced a voluntary reorganization under Chapter 11 of the United States Bankruptcy Code, and similarly, will file a recognition proceeding in Canada. Upon emergence from Chapter 11, Ligado anticipates that its debt will be reduced from roughly $8.6 billion today to approximately $1.2 billion. Ligado will continue to operate through the Restructuring, providing mobile satellite services (MSS) to its existing customers and advancing its mobile satellite plans.
At the same time, Ligado announced an agreement to provide AST SpaceMobile (NASDAQ: ASTS) with long-term access to up to 45 MHz of lower mid-band spectrum in the U.S. for direct-to-device satellite applications. This agreement, once finalized, will add capabilities to AST SpaceMobile’s technology and space-based network. Leveraging what the company says are the largest-ever communications arrays deployed in low Earth orbit, AST SpaceMobile will pair existing plans for the continental U.S. on low-band spectrum with the lower mid-band spectrum.
Under the commercial agreement, AST SpaceMobile will provide Ligado, subject to certain conditions precedent, with approximately $113 million of AST SpaceMobile warrants, and usage rights payments to fund Ligado’s payments under certain spectrum agreements. Additionally, Ligado will receive economic participation in AST SpaceMobile’s direct-to-device business in the U.S. and Canada.
In turn, AST SpaceMobile will receive long-term spectrum usage rights for over 80 years on up to 40 MHz of L-Band (1-2 GHz) MSS spectrum in the U.S. and Canada held by Ligado, plus access to an additional 5 MHz in the 1670-1675 MHz Band in the U.S. The Transaction is subject to the entry into definitive documentation, which is expected to occur during the first half of 2025.
“Adding premium lower mid-band spectrum access in the United States to the AST SpaceMobile network gives us long-term access to a large block of a scarce resource, significantly enhancing our planned space-based cellular broadband offering,” comments Abel Avellan, Chairman and CEO, AST SpaceMobile. “Alongside the previously announced 850 MHz nationwide network plans, access to the largest available block of high-quality nationwide spectrum will position us to deliver on our goal of peak data transmission speeds up to 120 Mbps, together with our mobile network operator partners, to enable a true broadband experience directly from space to everyday smartphones.”
By John Celentano, Inside Towers Business Editor
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