EchoStar Announces Agreement to Transfer BSS Business to
DISH
EchoStar Corporation
announced today that it executed an agreement with DISH
Network Corporation (NASDAQ:DISH) to transfer to DISH
the portion of its EchoStar Satellite Services business
that manages and provides broadcast satellite services
primarily to DISH and its subsidiaries (“BSS Business”).
EchoStar shareholders will receive 22,937,188 shares of
DISH Class A common stock upon consummation of the
transaction.
The BSS Business includes the business of EchoStar that
manages and provides broadcast satellite services to
DISH and its subsidiaries and DISH Mexico, S. de R.L. de
C.V. It also provides telemetry, tracking and
control services to satellites owned by DISH and a
portion of EchoStar’s other businesses. The
transaction will also include the products, assets,
licenses and technology, and the business operations,
revenues, billings, liabilities and operating
activities, primarily related to those businesses and
certain other EchoStar real estate properties.
Mike Dugan, President and CEO of EchoStar said. “This
transaction will allow EchoStar to focus our efforts on
our high growth business of broadband services and other
initiatives, while eliminating a negative growth
component of our financial performance and the risk
associated with providing services to a solitary
customer.”
At closing of the transaction, each EchoStar shareholder
as of the distribution record date will receive shares
in a newly created subsidiary of EchoStar housing the
BSS Business and other assets transferring in the
transaction to reflect such stockholder’s pro rata
ownership of EchoStar Class A and Class B common stock
in the aggregate (“Distribution”). Immediately
following the Distribution, a subsidiary of DISH will
merge with and into such entity and each EchoStar
stockholder as of the distribution record date will
receive a number of shares of DISH Class A common stock
equal to 22,937,188 divided by the total number of
shares of EchoStar Class A and Class B common stock
outstanding on the distribution record date. The
distribution record date has not yet been determined.
As of May 16, 2019, the total outstanding shares of
EchoStar Class A and Class B common stock was
approximately 95,719,000, which would result in the
issuance of approximately 0.24 shares of DISH Class A
common stock for each share of EchoStar Class A and
Class B common stock outstanding on that date. The final
exchange ratio will be determined on the distribution
record date.
The transaction is structured in a manner intended to be
tax-free to EchoStar and its shareholders. It is
expected to close during the second half of 2019,
subject to customary conditions, including receipt of
certain regulatory approvals.
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