Inmarsat today announces that it has reached agreement with LightSquared to amend certain terms of the Cooperation Agreement between the two companies. In connection with the amended terms, LightSquared has made a payment to Inmarsat of US$56.25 million, being the completion payment for Phase 1 transition which had previously been outstanding.Under the terms of the amendment, Inmarsat has agreed to suspend Phase 2 of the Cooperation Agreement until 31 March 2014. LightSquared may, at its option, elect to restart Phase 2 prior to this date. During the period of suspension LightSquared will not be required to make any Phase 2 payments to Inmarsat, including the formerly overdue payment of US$29.6 million which was due 31 March 2012.
On 1 April 2014, or an earlier date as elected by LightSquared, Phase 2 payments will recommence from that date based on a restructured payment plan that will differ from the previous Phase payments and be dependent on certain future outcomes with regard to deployment of the Light Squared network. A payment due on 4 April 2012 in relation to Phase 1.5 of the Cooperation Agreement has been renegotiated within the scope of the amended terms for Phase 2.
As a result of the amendment announced today, LightSquared will no longer be in default in relation to any payments under the Cooperation Agreement. Notices of default issued by Inmarsat to LightSquared in relation to previous non-payment events will no longer have any effect.
The amended terms of the Cooperation Agreement will allow LightSquared additional time to secure regulatory consents that may ultimately lead to the deployment of its ATC network in North America. The deployment of the LightSquared network remains a substantive revenue opportunity for Inmarsat, through Phase 2 of the Cooperation Agreement, and Inmarsat believes this amendment is in the best interests of Inmarsat's shareholders.
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