Globalstar responds to naysayers
internettelephony.com
NewsNow Story June 20, 2000
CEO releases statement on financial status
KELLY CARROLL
Globalstar has been spending a great deal of time in the
spotlight since it released its first quarter earnings report. And
although the light was not shining down on the company?s
positive aspects but instead on speculation that it might not be
able to raise the funds it will need to operate, the company
remains confident. In response to negative reports and industry
whispers, Bernard Schwartz released a statement to reassure
the investment community, which will help his company move
forward, that Globalstar is on track.
?We are confident in our ability to raise funding as required to
meet Globalstar?s needs and at the appropriate time will
consider several options available to us, including support from
our partners,? Schwartz said in his statement. However, as
previously reported, although the company maintains it has
sufficient funds on hand to continue the deployment of its
satellite system, it expects it will need additional financing by
September or October.
Although the company?s dismal first quarter performance
caused its stock price to plummet, Schwartz expects the
company will be in a more favorable position by the September,
October timeframe because of the anticipated deployment
progress. This also might boost its stock price, which will put it
in more positive light with investors. Regardless, its own
investors--Loral Space & Communication, Qualcomm,
Vodafone AirTouch--are up to date on the company?s
performance, Schwartz said.
In fact, in his statement Schwartz assured that its ?partners are
aware of its funding requirements and have indicated
intentions to support the project to its successful conclusion.?
While it was reported that the company?s requests for
additional funding were rejected, the company maintained that
this is inaccurate.
?There have been some misleading and distorted reports over
the newswires and around the water coolers of the world,? said
Mac Jeffery, senior director of communications for Globalstar
and Loral Space & Communications. Therefore, the company
released the report to address the many inquiries and concerns
it had been fielding, Jeffery continued.
Industry reports have stemmed from the fact that the satellite
communications provider generated $608,000 in the first
quarter and is expected to reach a total of $160 million for the
year. The lack of revenue could mean that the company would
be forced to repay a $250 million loan by the end of the month
instead of in December as was originally planned. If the loan
must be repaid this month, then the company would have to
raise additional funds.
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I don't think the last two lines are right. There isn't a $250 million dollar loan suddenly coming due at the end of the month |
