A new bidder emerges for wireless network provider LightSquared

LightSquared has been pursuing alternative ways out of bankruptcy other than through billionaire Charlie Ergen

LightSquared Inc. had planned to sell of all of its assets in an auction on Dec. 11. But LightSquared has canceled its auction in a court filing, and now, the world knows that it’s because a potential takeover bid is now taking place.

Private equity firm Centerbridge Partners LP has partnered with Harbinger Capital Partners and Fortress Investment Group LLC to bid $3.3 billion for the bankrupt wireless network provider, reports Bloomberg. The offer price reportedly does not include $1.7 billion in loans and liabilities.

LightSquared had previously begun the process of selling its important sections of the wireless spectrum in order to escape from bankruptcy. Dish chairman and billionaire Charlie Ergen was believed to be the top bidder at $2.2 billion for that asset.

However, LightSquared believed that they could have made even more than that $2.2 billion, if not for large U.S. GPS makers. On Nov. 1, LightSquared sued GPS makers, who the company believed was behind the Federal Communications Commission’s (FCC) refusal to allow LightSquared to expand its 4G LTE services development.

Some who see the new Centerbridge-led takeover believe the private equity firm must have received some answer it liked from the FCC concerning that potential development. “It would be really fascinating to know what Centerbridge heard from the FCC that gave them enough comfort to finalize a $3.3 billion bid,” said Tim Farrar, an analyst with TMF Associates Inc., to Bloomberg.

LightSquared previously had been reorganized by an ad hoc lenders group, led by Ergen, who had previously acquired about $1 billion in LightSquared debt. However, the company had been disputing with the lenders group from the very beginning and sought alternative ways out of bankruptcy that did not concern Ergen or Dish network.

“LightSquared is pursuing and negotiating an alternative transaction, supported by the significant stakeholders in the Chapter 11 case, other than the ad hoc secured group, that would be implemented through the debtors’ Chapter 11 plan,” LightSquared said in its Dec. 11 filing in a Manhattan court.

 

For more on the LightSquared saga, check out these InsideCounsel stories:

LightSquared sues GPS makers

Dish director quits after disagreement over handling of LightSquared deal

8 notable GCs in the news

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