19th Mar 2007 11:00
Inmarsat PLC19 March 2007 Inmarsat Finance III Limited agrees to lend up to US$250 million to CIP UKHoldings Limited London, UK: 19 March 2007. Inmarsat plc (LSE:ISAT, "Inmarsat") announces thatits subsidiary, Inmarsat Finance III Limited ("Inmarsat III") has entered intoan agreement with CIP UK Holdings Limited ("CIP UK") to provide a loan of up toUS$250 million to fund the acquisition by CIP UK's subsidiary CIP CanadaInvestment Inc ("CIP Canada") of the entire issued share capital of StratosGlobal Corporation ("Stratos") (TSX:SGB) through a Canadian trust created by CIPCanada and to pay fees and expenses of the transaction. CIP UK's parent company,Communications Investment Partners Limited ("CIP") is a professional investmentcompany with a focus on the satellite services sector. Concurrent with this announcement, Stratos has announced that it has enteredinto a definitive agreement to be acquired by CIP Canada. Under the terms of theagreement between Stratos and CIP Canada, CIP Canada expects to acquire theentire issued share capital of Stratos through a Plan of Arrangement for apurchase price of C$6.40 per share. CIP Canada's offer is conditional uponapproval of the Plan of Arrangement by two-thirds of votes cast at a meeting ofStratos shareholders as detailed in the Stratos Management Proxy Circular whichCIP Canada expects will be mailed to Stratos shareholders in late April 2007.The transaction will also be subject to customary conditions and regulatoryapprovals, including any applicable clearances under anti-trust laws, andapproval of the US Federal Communications Commission. Under the terms of the loan facility between Inmarsat III and CIP UK, CIP UK maydraw up to US$250 million to fund CIP Canada's acquisition of Stratos and to payfees and expenses of the transaction which is expected to close during the thirdquarter of 2007. Additional funds will be available under the loan facility tosupport CIP Canada's funding of a Stratos senior facility consent process, orCIP Canada's funding of a tender offer for Stratos' outstanding bonds requiredfollowing completion of CIP Canada's acquisition. The loan facility is a tenyear term loan with an interest rate of 5.75% through 31 December 2010 and 11.5%thereafter (interest is on a PIK basis to 14 April 2009). The loan facility issecured by means of a right of sale pledge granted by CIP UK over itsshareholding in CIP Canada whose sole asset will be its investment in Stratos. Subject to closing of the Plan of Arrangement, Inmarsat III will be granted anoption to acquire CIP UK ("the Call Option"), for which it will pay US$750,000on completion of CIP Canada's acquisition of Stratos. Inmarsat III's Call Optionbecomes exercisable in April 2009, when certain of Inmarsat's distributionagreements expire. Upon exercise of the Call Option, Inmarsat III will pay CIPan exercise price of between US$750,000 and US$1,000,000. Until exercise of itsCall Option, neither Inmarsat III nor any other member of the Inmarsat Groupwill have any equity interest in or ownership or control over the management orpolicies of Stratos. Andrew Sukawaty, Inmarsat's Chairman and Chief Executive Officer said, "A keystrategic objective for Inmarsat is to continue to improve the efficiency of itsdistribution channel and the routes to market for its services. This transactionincreases Inmarsat's flexibility to achieve this objective after April 2009 whenthe call option held by Inmarsat III becomes exercisable." In order to provide the loan facility to CIP UK, Inmarsat III has entered into aUS$411.5 million borrowing facility agreement with three banks. Borrowings underthis facility will be structurally subordinated to all of Inmarsat's otheroutstanding indebtedness, but will be guaranteed by Inmarsat plc. Subject toclosing, Inmarsat III expects to draw US$260 million of the facility to fund theloan to CIP UK and to pay fees and expenses of the transaction. The finalamounts of the loans remain subject to the finalisation of fees and expenses andcertain hedging arrangements. Pro-forma for a drawdown of US$260 million,Inmarsat's December 2006 net external borrowings would increase toUS$1,097 million. The undrawn facility amounts will be available to Inmarsat IIIto fund an additional loan to CIP UK to support CIP Canada's funding of a tenderoffer for Stratos' outstanding bonds required following completion of CIPCanada's acquisition. A presentation regarding this announcement is available on our website. Toaccess this presentation please go to www.inmarsat.com/investor_relations. Inmarsat management will host a conference call for analysts and investors onMonday 19 March at 3pm (UK GMT). To access the call please dial +44 (0) 1452 542300 with participant number 3165107. A live audio webcast of the conference callwill also be available, to access the webcast please go to www.inmarsat.com/investor_relations. Lehman Brothers acted as exclusive financial advisor to Inmarsat on thistransaction. Forward-looking Statements Certain statements in this announcement constitute "forward-looking statements"within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.These forward-looking statements involve risks, uncertainties and other factorsthat may cause our actual results, performance or achievements, or industryresults, to be materially different from those projected in the forward-lookingstatements. These factors include: general economic and business conditions;changes in technology; timing or delay in signing, commencement, implementationand performance of programmes, or the delivery of products or services underthem; structural change in the satellite industry; relationships with customers;competition; and ability to attract personnel. You are cautioned not to rely onthese forward-looking statements, which speak only as of the date of thisannouncement. We undertake no obligation to update or revise any forward-lookingstatement to reflect any change in our expectations or any change in events,conditions or circumstances. About Inmarsat: Inmarsat plc (LSE:ISAT) is the leading provider of global mobile satellitecommunications. Since 1979, Inmarsat has been providing reliable voice andhigh-speed data communications to governments, enterprises and otherorganisations, with a range of services that can be used on land, at sea or inthe air. The company's services are delivered through a global network of 440partners, including the world's leading telecoms groups, operating in 180countries. For the year ended 31 December 2006, Inmarsat plc had total revenueof US$500.1 million and profit before tax of US$89.8 million. About Stratos: Stratos Global Corporation is a global telecommunications services provider,offering satellite and wireless communication services through a range oftechnologies and platforms provided by Inmarsat, Iridium, Globalstar, MSAT, VSATand others. Stratos end users include government, military, oil and gas,maritime, industrial, aeronautical, media and recreational users across theglobe. For the year ended 31 December 2006, Stratos had total revenues ofUS$537.8 million, EBITDA of US$74.7 million, loss before tax of US$31.0 million,and gross assets of US$777.7 million. About CIP: CIP is a professional investment company with a focus on satellite servicescompanies in both Fixed Satellite Services ("FSS") and Mobile Satellite Services("MSS"). The five directors of CIP collectively have more than 50 years ofexperience as directors of and advisors to satellite service companies in boththe FSS and MSS sectors. CIP UK and CIP Canada are wholly-owned subsidiariesof CIP. Contacts: Media Enquiries:Finsbury:Edward Simpkins Tel: +44 20 7251 3801, mobile: 07947 740 551Guy Lamming Tel: +44 20 7251 3801, mobile: 07804 953 489 Investor Enquiries:Simon AilesTel: +44 20 7728 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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