TSL Express Daily News

RESTON, VA. – January 6, 2025 – Satellite communications company Ligado Networks (“Ligado”) announced today that it has entered into a comprehensive restructuring support agreement (the “Restructuring Support Agreement”) with a significant portion of its existing creditors (the “Supporting Creditors”). The Restructuring Support Agreement provides for a comprehensive balance sheet restructuring (“Restructuring”).

The Supporting Creditors hold approximately 88% of Ligado’s funded indebtedness, and the Restructuring provides for the conversion of approximately $7.8 billion of existing debt into new preferred equity and the preservation of the existing interests in the capital structure below the new preferred equity.

To effectuate the Restructuring, Ligado has commenced a voluntary reorganization under Chapter 11 of the United States Bankruptcy Code, and Ligado will file a recognition proceeding in Canada. The Chapter 11 filing was made in the U.S. Bankruptcy Court for the District of Delaware, and the recognition proceeding will be filed pursuant to Part IV of the Companies’ Creditors Arrangement Act (Canada) in the Ontario Superior Court of Justice.

As part of the Restructuring, the Supporting Creditors have agreed to provide a fully backstopped financing commitment to provide $115 million of additional incremental financing to fund Ligado during the restructuring process. At emergence from Chapter 11, Ligado anticipates that its indebtedness will be reduced from $8.6 billion today to approximately $1.2 billion.

A commercial agreement with AST SpaceMobile Inc. (“AST SpaceMobile”) also comprises a key element of the Restructuring, under which AST SpaceMobile has agreed to provide Ligado, subject to certain conditions precedent, with approximately $113 million of AST SpaceMobile warrants, and usage rights payments to fund Ligado’s payments under certain spectrum agreements. Additionally, Ligado will receive economic participation in AST SpaceMobile’s direct-to-device business in the U.S. and Canada.

In exchange for these payments, AST SpaceMobile will receive usage rights to Ligado’s L-Band mobile satellite services (MSS) spectrum. The hosting of Ligado’s L-Band spectrum on AST SpaceMobile’s advanced low earth satellite network is a sea change with the potential to materially accelerate and expand consumers’ access to space-based broadband.

Ligado will continue to operate through the Restructuring, providing MSS to its existing customers and advancing its mobile satellite plans to emerge from Chapter 11 on firm footing.

“This restructuring allows us to concentrate on our ongoing value-maximizing daily work and other key initiatives for the benefit of all of our stakeholders,” said Doug Smith, President and Chief Executive Officer of Ligado.

Events Leading to the Chapter 11 Filing

The filing was precipitated by large operational losses Ligado suffered due to the U.S. government’s unlawful taking without just compensation of Ligado’s licensed spectrum and follows a year-long effort to secure a comprehensive resolution with satellite communications company Viasat to restructure Ligado’s significant payment obligations to Inmarsat, which Viasat acquired in 2023.

The Chapter 11 filing allows Ligado to take advantage of the post-filing period to pursue its lawsuit against the U.S. government and continue advancing its mobile satellite plans and building the L-Band commercial ecosystem for its spectrum assets.

“Ligado will continue to vigorously prosecute its litigation against the U.S. government to enforce its constitutional right to just compensation for the government’s unlawful taking of Ligado’s licensed L-Band spectrum,” said Smith.

The U.S. Government’s Unlawful Taking of Ligado’s Spectrum Access

For decades, Ligado has provided mobile satellite services to the critical communications sector in the U.S. In addition to its satellite services, Ligado’s terrestrial spectrum assets are part of the U.S. roadmap to expand 5G services and accelerate the integration of mobile satellite and terrestrial networks.

In 2020, the Federal Communications Commission (FCC) granted Ligado exclusive rights to operate terrestrial 5G services within its licensed L-Band spectrum after a comprehensive, multiyear review process. Following this, Ligado raised billions of dollars to expand its network, hire employees, and invest in technology to prepare its spectrum to support next-generation terrestrial 5G services.

However, the Department of Defense (DOD) unilaterally seized Ligado’s licensed spectrum, depriving the company of its chance to execute its ambitious 5G business plan. In 2023, Ligado filed a lawsuit against the DOD, the Department of Commerce (DOC), and the National Telecommunications and Information Administration (NTIA)1 , an agency within DOC, seeking just compensation for the spectrum license it has been unable to use.

On November 18, 2024, the U.S. Court of Federal Claims denied in part the government’s Motion to Dismiss Ligado’s claims against it, ruling that Ligado had properly alleged that the U.S. government engaged in physical, categorical, and regulatory takings of Ligado’s exclusively licensed spectrum without compensation in violation of the Fifth Amendment and the Tucker Act. This was a significant win for Ligado at this stage in the litigation, and Ligado will continue to pursue its claims through the pendency of its Chapter 11 proceedings.

“The DOD’s actions constitute the largest uncompensated taking of private property in the U.S. in modern times and have caused Ligado catastrophic financial distress,” said Smith.

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Court filings and information about the restructuring are available at https://omniagentsolutions.com/Ligado. Information is also available by calling 800-873-4813 (US & Canada toll free) or 818-574-7325 (International).

Advisors

Perella Weinberg Partners LP is serving as investment banker to Ligado, FTI Consulting, Inc. is serving as financial advisor, Milbank LLP is serving as legal counsel, and Richards, Layton & Finger P.A. is serving as co-counsel. An ad hoc group of first lien creditors is being advised by Guggenheim Securities, LLC as financial advisor, and by Sidley Austin LLP as counsel. An ad hoc group of crossholding creditors is being advised by Kirkland & Ellis LLP.

About Ligado Networks

Building on 25 years of experience providing mobile satellite services, our mission is to bring versatile connectivity to the businesses, people, and places that need it most. Our satellite and terrestrial solutions, combined with powerful, lower mid-band spectrum, serve to supplement and broaden mobile coverage across the United States and Canada. For more information, visit www.ligado.com.

For further information

Ligado Networks Media Contact: media@ligado.com

Cautionary Statement Regarding Forward-Looking Statements

The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward-looking statements. Unless the context otherwise requires, the terms “Ligado”, “Company”, “we”, “our” and “us”, when used throughout this discussion and analysis, are references to Ligado Networks LLC and its subsidiaries. Additionally, references to “spectrum” and “networks” include the satellites, spectrum, and networks of Ligado, including its subsidiaries, on a consolidated basis.