LightSquared defaults on Inmarsat payment

Reuters News
Posted: Feb 20, 2012 2:58 AM
LightSquared defaults on Inmarsat payment

LONDON (Reuters) - Satellite firm Inmarsat <ISA.L> said on Monday that its partner LightSquared, a venture struggling to build a U.S. mobile broadband service with Inmarsat's spectrum, had failed to pay a $56.25 million installment to the British company.

The Federal Communications Commission on Tuesday said it planned to revoke permission for LightSquared to build out its network after tests showed it would interfere with the Global Positioning System used by airlines, the military and others.

After the FCC news, some analysts speculated that bankruptcy may be close at hand for LightSquared, especially after it had earlier warned that it would run out of money early this year.

Inmarsat said it had issued a default notice to LightSquared on Monday, giving it 60 days to make the payment before it terminated the co-operation agreement.

Inmarsat said it had started talks with the U.S. company, which is backed by billionaire hedge-fund manager Philip Falcone, but it could not provide any assurance it would receive any more payments.

It said its core business, which provides communications to shipping, aircraft and remote locations worldwide, was unaffected.

(Reporting by Paul Sandle)