Globalstar (GSAT), a provider of mobile satellite voice and data services, said after market close on Wednesday that it has begun an offering of $125 million in shares of voting common stock in a registered underwritten public offering.
Globalstar will grant the underwriters a 30-day option to buy up to $18.75 million in additional shares of voting common stock.
This offering is made to satisfy a requirement relating to the June 2017 credit agreement amendment.
As required by the credit agreement with its senior lenders, Globalstar will deposit 80% of the net proceeds in a restricted account for the benefit of the lenders under the facility agreement.
The proceeds held in the restricted account are expected to be drawn to pay principal and interest due under the facility agreement in December 2017 and June 2018.
Globalstar expects that the remainder of the proceeds will be used for general corporate purposes.