LightSquared got the green light from US regulators to transfer its spectrum to a newly formed company, “paving the path” for it to emerge from bankruptcy protection.
The US Federal Communications Commission (FCC) approved the company’s ‘Change of Control’ application, which will see it transfer its spectrum licences to a ‘New LightSquared’, with a new leadership team headed up by former Verizon chairman and CEO, Ivan Seidenberg.
LightSquared filed for chapter 11 bankruptcy protection in May 2012 after the FCC blocked its plans to launch a wireless network, bowing to objections from GPS companies. The GPS industry claimed the spectrum owned by LightSquared was in close proximity to the airwaves they use, and could interfere with their services.
In a statement, Seidenberg said the company intends to do “everything possible to achieve a reasonable business solution as well as an engineering consensus between wireless broadband and the GPS industry”.
“We recognise that our number one job will be to resolve technical issues and liberate scarcely used satellite spectrum that’s actually ideal for the cellular industry. I am confident we can reach a mutually acceptable outcome that not only makes industry better off but also benefits consumers of wireless and GPS products.”
Joining Seidenberg on the company’s board is Reed Hundt, a former FCC chairman. Notable absentees include Phil Falcone, who heads up Harbinger Capital Partners, the hedge fund that backed the company in 2012, and Charlie Ergen, chairman of satellite company Dish, which bought out LightSquare’s bank debt to become its largest creditor.
Falcone’s Harbinger, which launched legal action against the FCC for breaking promises which it claimed contributed to LightSquare’s failure, will however own up to 44 per cent in the revamped company, despite having no direct day to day involvement in its operations.
According to a Wall Street Journal report, Ergen, who also tried to buy LightSquared spectrum in the past, will be paid more than $1 billion for his holdings in the company.
The ‘New LightSquared’ will also be part owned by Fortress Investment Group, LLC Centrebridge Partners and JP Morgan Chase.