By Suzanna Kerridge, 26 September 2000 12:16
NEWS The companies were forced to invest as Globalstar was unable to honour a debt of $250m to the Chase Manhattan bank in June. In accordance with subscription agreements, Loral Space & Communications, Vodafone, Qualcomm, Elsacom and the France Telecom/Alcatel partnership had to repurchase common stock, allowing Globalstar to use proceeds to keep afloat. In addition, ChinaSat has pledged to invest $12m, subject to approval from the Chinese government. The cash injection comes only one week after Bear Sterns invested $105m in Globalstar. The combined investment provides the company with enough financial backing to run operations until the middle of 2001. In a statement, Globalstar pledged to use the investment for general corporate purposes including capital expenditure and operations such as marketing and the distribution of phones and services.
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