Globalstar shirks debts causing shares to tumble

NEWS Shares dropped to E0.96 (60p) from a high of E12 (£7.60) as the company revealed it cannot pay Lorel or Qualcomm the $45m it owes. In a statement, Globalstar said it is essential to preserve the remaining capital of the company to continue commercial activities. It has suspended payments on principal and interest payments of all funded debt including its credit facility, vendor financing agreements and Senior notes, as well as dividends paid on preferred stock. Bernard Schwartz, chairman of Globalstar, said the decision has the support of the company's partners as it enables the business to have sufficient cash to fund operations until 2002.