Harbinger: exiting Inmarsat to reduce exposire risk to LightSquared?
It appears that Harbinger Capital is reducing its exposire to Inmarsat in order to assist Lightsquared, its ambitious $7b start-up that intends to offer wholesale LTE and satellite services across the United States.
On October 3 2010, Lightsquared closed on $850 million of debt. This was funding which represents the initial round of a syndicated secured credit facility arranged and led by UBS AG. It also eased the pressure off Harbinger Capital who had been leading the investment in the newly formed venture.
Sanjiv
Ahuja,
chairman
and
chief
executive
officer
of
LightSquared,
stated:
"We
are
extremely
pleased
that
we
have
secured
this
significant
amount
of
financing
and
believe
it
endorses
our
overall
business
model,
while
providing
LightSquared
with
a
solid
step
forward
to
execute
our
strategy
and
begin
building
out
our
4G-LTE-wholesale
network."
One
day
later there
was
press
speculation
that
Harbinger
was
about
to
off
load
10%
of
Inmarsat.
This,
in
turn,
brought
a
statement
that
day,
stating
while
Harbinger
Capital
was
reviewing
its
options,
that
no
decision
has
yet
been
taken
as
to
any
transaction
by
Harbinger
involving
the
share
capital
of
Inmarsat.
On 5
October
it
was
clear
that
Harbinger
had
off
loaded
around
65
million
Inmarsat
shares"
approximately
14
percent
of
Inmarsat's
share
capital,
and
half
the Harbinger
investment.
There
will
now
be
somewhere
in
the
region
of a
six
month
wait
to
see
if
Harbinger
will
off
load
the
rest
of
its
Inmarsat
stake.
With
the
Inmarsat
stock
price
falling,
one
would
assume
that
a
lot
of
investors
read
this
one
wrong,
Inmarsat's
share
price
was
seen
by
many
as
inflated
while
speculators thought
a
Harbinger
takeover
of
the
company
on
the
cards.
On a
business
front,
Inmarsat's
core
business
is
in
reasonable
condition,
while
its
stock
price
should
stabilise
at a
realistic
level.
