<<Hello! Anybody home? Have you made it all the way to here?>>
Yeah I am with you.<GG>
You’re right <<Bernard said there is no expectation of bankruptcy before May and that Loral shouldn't need to support Globalstar to commercial viability. >>
I also agree with PCSTEL that the WSJ article was no mistake. BLS is too sharp for that, IMHO. I think, like others have said, the WSJ article was a preemptive move to protect Loral’s value. If LOR loses cap then Bernie has trouble getting financing. BLS has used this now to take over control of G* BOA’s note. This raises the question of who pays the interest on the $500 mil. Somebody still must service the note. So financially nothing has changed, except that LOR has stop BOA from pulling the plug on G*. So G*’s burn rate is still the same.
Revenues – How does G* develop the revenues need to offset a major portion of this burn rate before the cash runs out this Spring. Can’t be IFN, IFN doesn’t start till 3Q 2001. Large DOD contract, Wingcast, On-Star, etc. could help, but I figure it will take 3-6 months for any of these services to ramp up, and none of them are big enough to carry the load by themselves.
Voice? You are right, the cost per MOU is way too high to make voice a possible savior by spring. Right now, Verizon, Sprint and the others are in a price war offering 1000 minutes free at very low rates with nearly free phones. Once people sign up they are locked in for a year or more.
BLS has too get more money to get into 2002. If he can get into 2002 then there should be sufficient revenue streams to support Globalstar to commercial viability. How does he do that?
I don’t see any way for BLS to benefit personally from a G* BK. I have yet see the CEO who lead a company into BK manage that company after reorganization. Plus BLS has a lot of G* shares. At this time I can not see a path out of this for G*. I like Jon Koplik’s idea of retiring the bonds, but as pointed out that won’t be easy because as soon as the market gets wind of it the bond prices will start moving up. PCSTEL idea is good of trading interest payment for equity over the next 2 years. If BLS can swing this, he can stretch current cash reserves into 2002.
BTW I find your post to be humorous and insightful.
Best Regards
Bob |
