LightSquared proposes reorganization, asset sale: reports

Beleaguered mobile broadband operator LightSquared has filed a “reorganization plan” with the US Banktupcy Court in Manhattan that proposes a sale of assets as a means of overcoming its difficulties, reports Dow Jones Newswires.

The operator filed for bankruptcy protection in May 2012, following a government ruling that its spectrum would interfere with global positioning systems, and since then has made concessions on spectrum sharing that it hopes will convince authorities its network can be used.

Beleaguered mobile broadband operator LightSquared has filed a “reorganization plan” with the US Banktupcy Court in Manhattan that proposes a sale of assets as a means of overcoming its difficulties, reports Dow Jones Newswires.

The operator filed for bankruptcy protection in May 2012, following a government ruling that its spectrum would interfere with global positioning systems, and since then has made concessions on spectrum sharing that it hopes will convince authorities its network can be used.

But while it awaits a regulatory decision, the operator said it had no choice but to begin preparing for an asset sale.

“We remain wholeheartedly committed to pursuing [regulatory approval] and continuing to work with all stakeholders, but we must consider other options if the regulatory process cannot keep pace with the restructuring process,” said Doug Smith, LightSquared’s (Reston, VA, USA) chief executive, as quoted by Dow Jones.

LightSquared is currently controlled by Philip Falcone’s Harbinger Capital Partners (New York City, NY, USA), but its wireless spectrum has attracted the interest of Dish Network (Meridian, CO, USA), whose recent efforts to acquire other frequency-rich assets have been thwarted.

Dish has reportedly offered to pay $2.2 billion for LightSquared’s assets and already bought $1 billion of LightSquared’s debt with the backing of various hedge funds in control of $1.4 billion of LightSquared’s debt.

One of LightSquared’s proposals includes holding an auction of assets, but the operator’s lender group has expressed concern about its management of this process, according to a report from Bloomberg, largely because controlling shareholder Falcone wants to block the sale.

The lenders have proposed running the auction but said that Dish Network’s investment vehicle should not be involved in auction decisions to avoid conflicts of interest.

LightSquared’s ultimate ambition is to build a 4G network and become a provider of wholesale services, but the market has become extremely competitive since it filed for bankruptcy protection more than a year ago.