LightSquared misses Inmarsat payment
(Reuters) - Satellite firm Inmarsat said LightSquared, a venture struggling to build a U.S. mobile broadband service with Inmarsat's spectrum, failed to pay a $56.25 million installment to the British company.
Inmarsat was scheduled to receive the payment from LightSquared after the completion of the first phase of their agreement.
However, LightSquared said final payment was not yet due until Inmarsat replies to several issues that it had raised.
"LightSquared has raised several matters that require resolution before the first phase comes to a close," it said in a statement.
A person close to LightSquared said the deal with Inmarsat allows a "cure" period so there is no immediate default.
Inmarsat issued a default notice to LightSquared on Monday, giving it 60 days to make the payment before it terminated their co-operation agreement.
Inmarsat also said it had started talks with the U.S. company, backed by billionaire hedge-fund manager Philip Falcone, regarding the future of the agreement.
The satellite company said its main business, which provides communications to shipping, aircraft and remote locations worldwide, was unaffected, but could not provide any assurance that it would receive any more payments from LightSquared.
Last week, the U.S. Federal Communications Commission said it planned to revoke permission for LightSquared to build out its network after tests showed it would interfere with the Global Positioning System used by airlines, the military and others.
After the FCC news, some analysts speculated that bankruptcy may be close at hand for LightSquared, especially after it had earlier warned that it would run out of money early this year.
Tim Farrar, a telecom industry consultant, said it is too soon to say whether the dispute between LightSquared and Inmarsat will trigger a default on the roughly $1.5 billion in loans that LightSquared has outstanding.
He said if there are still "pending questions" to be resolved as LightSquared alleges on the Inmarsat contract, then LightSquared's decision not to make the payment would not necessarily represent a default at this point in time.
Shares of Inmarsat fell 2 percent to 473.1 pence on Monday before paring some losses to trade at 478.5 at 1402 GMT.