By Dow Jones Business News,
December 26, 2013, 12:55:00 PM EDT
Wireless venture LightSquared Inc. is seeking to exit bankruptcy protection with backing from private-equity firm
Fortress Investment Group LLC and Melody Capital Advisors LLC.
LightSquared, which has been at the center of a fight for control between hedge fund manager Phil Falcone and Dish
Network Corp.'s Charlie Ergen, filed a new plan to exit Chapter 11 proceedings on Tuesday night, with more than $4
billion of debt-and equity backing from Fortress, Melody and existing investors J.P. Morgan Chase & Co. and Mr.
Falcone's Harbinger Capital Partners.
The Fortress-led investors would pump at least $1.25 billion in new equity in a reorganized LightSquared, according to
papers filed in U.S. Bankruptcy Court in New York.
The new plan includes $2.5 billion in so-called exit financing, plus $250 million loan earmarked for a reorganized
LightSquared. Melody, a New York private-equity firm co-founded by former UBS investment banker Cesar Gueikian,has
agreed to provide LightSquared with a bankruptcy loan of at least $285 million.
The combination of more than $4 billion in new debt and equity will be enough to pay allowed claims of creditors and
equity investors in full, court papers said.
Closing of the new deal is conditioned, however, upon approval from regulators, including the Federal Communications
Commission, of LightSquared's efforts to pursue a so-called spectrum swap that would allow the company to expand its
network, according to court papers.
The filing of the Fortress-backed plan comes a week after another private-equity firm, Centerbridge Partners LP,
abandoned its own $5 billion deal to acquire LightSquared, reportedly over concerns about regulatory approval for the
Before Centerbridge dropped out, LightSquared canceled a bankruptcy auction at which satellite-television giant Dish
Network was set to bid $2.2 billion for a large swath of the company's spectrum. Dish's bid, which isn't conditioned
upon FCC approval, is part of a reorganization plan filed by a group of LightSquared lenders owed nearly $2 billion.
That group includes an investment vehicle controlled by Mr. Ergen.
LightSquared filed for bankruptcy protection in May 2012 after the FCC blocked the company's plan to proceed with the
its next-generation wireless network.
Judge Shelley C. Chapman, who is overseeing the LightSquared case, scheduled a hearing for Monday in Manhattan
bankruptcy court to consider whether LightSquared can seek approval of its modified plan without putting the new
proposal to creditors for a vote.
-Mike Spector and Emily Glazer contributed to this article.
Write to Patrick Fitzgerald at firstname.lastname@example.org
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