Inmarsat payment missed by Lightsquared

1st Oct 2014 15:00

Satellite group Inmarsat has issued a notice of default to bankrupt US partner Lightsquared after a scheduled payment was not paid. A quarterly payment of $12.5m and a $5m related payment were due on 30 September but Inmarsat said the $17.5m (£10.8m) payment has not been received.The payment was due under the terms of a 2007 cooperation agreement between the two companies and the notice of default on Wednesday gives LightSquared 60 calendar days to make the payment.After this period, Inmarsat is entitled to enforce its rights and remedies under the agreement for payment default, including pre-agreed spectrum arrangements and termination of certain LightSquared rights."The revenue generation of Inmarsat's group business remains unaffected by today's announcement," the company added.The cooperation agreement with Lightsquared, which had been suspended, was renewed in March but the troubled US company has previously failed to make required payments since.In late August, Inmarsat received a $9.1m payment from Lightsquared, but warned future payments continued to be "subject to significant uncertainty".Inmarsat's first-half results, released earlier that month, showed a $47.1m revenue shortfall from missed payments.For its part, LightSquared has lost $1.6bn since it filed for bankruptcy in May 2012, losing $81.4m in August alone.Lightsquared is attempting to reorganise into the hands of a group which holds its near-$1bn bank debt, who would be paid in full and support the company's latest restructuring proposal.Other creditors, including the largest holder of that bank debt, don't support the restructuring, the WSJ recently reported.