04 April 2014: Inmarsat provides the following update with regard to its Cooperation Agreement with LightSquared. On Monday 31 March 2014, in line with the terms of the agreement, LightSquared elected to restart Phase 2 which had been suspended since 20 April 2012. In connection with this election notice, a payment of US$5 million became due after 5 business days and was received on 3 April 2014.
Phase 2 quarterly payments will become due for payment by LightSquared within 30 days of 1 June 2014, the date on which the parties have agreed that the Phase 2 spectrum for this option will be made available for use. Thereafter, Phase 2 payments will fall due on the next 31 March, 30 June, 30 September, and 31 December of each year. The payments due under the Phase 2 option elected by LightSquared are US$12.5 million per quarter, increasing at a rate of 3% annually with an additional amount of US$5 million per quarter payable for the first 10 quarters. LightSquared has elected the Phase 2 option with the lowest associated payments due to Inmarsat and has until 31 March 2016 to make further elections which would give LightSquared additional spectrum rights and increase payments due to Inmarsat.
Further payments from LightSquared are subject to significant uncertainty. In May 2012, LightSquared filed for a reorganisation under Chapter 11 of the United States Bankruptcy Code and is yet to complete a reorganisation process that would allow LightSquared, among other things, to fund its further operations including payments to Inmarsat. Investors are cautioned that this announcement provides no guarantee that any further payments will be received from LightSquared.