In a new filling with the Securities and Exchange Commission (SEC), Globalstar states that it has secured US$252 million in prepayment from it’s partner. That partner being Apple.
Globalstar will use the funds from Apple “to pay amounts currently due and payable, and future amounts due, under its previously disclosed Satellite Procurement Agreement with Macdonald, Dettwiler and Associates (MDA) Corporation, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of these satellites.”
MDA is due the money after signing a deal with Globalstar a year ago as the prime contractor for 17 satellites to replenish the their communication constellation. That deal also includes an option for an additional nine satellites.
At the time the MDA deal was announced, Globalstar had an unnamed customer lined up. In November it was officially confirmed that Apple was the customer and would using Globastar for an Emergency SOS service via satellite for iPhone 14 models.
However, it was just over three weeks ago that the deal appeared to be under stress as Globalstar entered a second forbearance. Globalstar has until March 15, 2023 “to forbear from the exercise of remedies in respect of amounts due and unpaid.”
With the news of Apple’s prepayment, the deal with MDA appears to be back on track. The initial Globalstar contract was valued at US$327 million (CA$415M at the time of signing). If the contract option is exercised, that would add another US$102.6 million (CA$130M) for a total contract value of CA$545 million..