1st Oct 2014 13:29
LONDON (Alliance News) - Inmarsat PLC said Wednesday that it has issued a notice to its US partner LightSquared Inc giving it 60 days to make an quarterly outstanding payment before it is entitled to enforce its rights and remedies under their agreement for payment default.
The satellite operator did not receive its quarterly payment from LightSquared of USD12.5 million, and a related payment of USD5.0 million under phase 2 of their cooperation agreement.
Inmarsat noted that revenue generation of its business is not affected by the delayed payment. Under phase 2 of the cooperation agreement between the two companies, Inmarsat will support a wireless radio spectrum plan to increase the total capacity it has available to LightSquared.
The phase 2 stage had previously been suspended since April 20, 2012. However, LightSquared opted to restart phase 2 of its cooperation agreement with Inmarsat.
Inmarsat received a quarterly payment from LightSquared in August, however at that time it warned that further payments remain subject to uncertainty as the US firm has yet to complete a reorganisation process following its collapse into bankruptcy in May 2012. The failure of the Virginia-based company to complete its reorganisation process means LightSquared is unable to fund further operations, including its payments to Inmarsat.
Shares in Inmarsat were trading down 0.4% at 699.00 pence Wednesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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