Loral Offers to Buy a Portion of Globalstar Partners' Holdings

Half of Proceeds Will be Used to Buy Gateways and User Terminals

Soros Funds to Buy Interest in Globalstar

NEW YORK, April 24, 1998 -- Loral Space & Communications (NYSE:LOR) announced today a series of transactions which upon completion will have the effect of (1) increasing Loral's ownership in Globalstar Limited Partnership to 42 percent, (2) establishing a Globalstar service provider fund of $210 million for reinvestment in the Globalstar project through the purchase of Globalstar gateways and user terminals and (3) adding the Soros funds as a significant equity investor in Globalstar. First, Loral has offered to buy, for its own account and for the benefit of the Soros funds, up to 4.2 million of partnership interests in Globalstar Limited Partnership (corresponding to 8.4 million shares of Globalstar Telecommunications Ltd. (GTL) common stock (NASDAQ:GSTRF) from its original service provider partners for $100 per partnership interest (corresponding to $50 per share of GTL stock). This represents 30 percent of each partner's holdings. Partners accepting the Loral/Soros offer will be required to reinvest one-half of their proceeds, or up to $210 million in the aggregate, into the Globalstar project by establishing an escrow account to be used solely for the purchase of Globalstar gateways and handsets.

Second, the form of the transaction stipulates that Loral will sell to the Soros funds GTL common stock representing one-half the amount of equivalent GTL shares acquired by Loral in connection with the offer, or up to 4.2 million GTL shares. The Soros funds will be acquiring GTL stock in lieu of Globalstar limited partnership interests at a premium to Loral of $8.333 a share over the price paid by Loral. The shares to be purchased by the Soros funds will be restricted and may not be sold without registration. GTL, however, has agreed to provide a shelf-registration for these shares to be effective one year after their purchase.

Loral will fund the purchase of partnership interests through a public offering, which it expects to initiate shortly, of approximately $500 million of the company's common stock, or approximately 16 million shares representing less than 5 percent of Loral's equity capitalization. The company plans to use the balance of the offering proceeds to invest in its core businesses and to pursue satellite service opportunities.

"This transaction benefits all parties involved," stated Bernard L. Schwartz, chairman and chief executive officer of Loral and chairman and chief executive officer of Globalstar. "The transaction will provide up to $210 million of cash to support the deployment of Globalstar ground equipment and user terminals; it welcomes a strong, new shareholder whose international scope may prove to be of strategic value; and it allows Loral to increase its equity ownership in Globalstar to 42 percent. Further, the transaction offers an answer to the needs of several of our Globalstar partners during the financial crisis in Asia while simultaneously enabling all partners to maintain a significant interest in Globalstar."

If Loral has not received acceptance notices from partners wishing to sell an aggregate of at least 4.2 million partnership interests by close of business on May 4, 1998, the offer expiration date, Loral may purchase additional interests from those partners who wish to sell more of their partnership interests to Loral. There can be no assurance that all partners will participate or that 4.2 million partnership interests will be offered for sale. In no event, however, will Loral purchase more than 4.2 million partnership interests.

As a result of the offering, assuming that Loral purchases 4.2 million partnership interests, and after giving effect to the Soros transaction, Loral's direct and indirect ownership in Globalstar L.P. will increase from approximately 38 percent to approximately 42 percent. Soros' indirect ownership in Globalstar L.P. through this transaction would equal approximately 4 percent. The offering is contingent upon completing the Loral financing, the closing of the transaction with the Soros funds and the satisfaction of all requirements under the partnership agreements, applicable laws and regulations.

Globalstar, led by Loral Space & Communications, is a partnership of the world's leading telecommunications service providers and equipment manufacturers, and includes QUALCOMM Incorporated, AirTouch Communications, Alcatel, Alenia, China Telecom, DACOM, Daimler-Benz Aerospace, Elsacom, a Finmeccanica/Elsag Bailey Company, France Telecom, Hyundai, Space Systems/Loral and Vodafone. For more information, visit Globalstar's web site at http://www.globalstar.com.

Loral Space & Communications (NYSE:LOR) is a high-technology company that primarily concentrates on satellite manufacturing and satellite-based services, including broadcast transponder leasing and value added services, domestic and international corporate data networks, global wireless telephony, broadband data transmission and formatting, Internet connectivity, digital audio radio services, and international direct-to-home satellite services. For more information, visit Loral's web site at http://www.loral.com.

# # #

回首页全球星介绍新闻 技术特点合作伙伴与我们联系产品与服务