Iridium Communications Inc. (NASDAQ:IRDM) Files An 8-K Entry into a Material Definitive Agreement

Iridium Communications Inc. (NASDAQ:IRDM) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

Story continues below

On March 9, 2018, Iridium Communications Inc. (the “Company”) commenced an offering, to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), for the issuance of $360million in aggregate principal amount of senior notes due 2023 (the “Notes”) in a private placement (the “Offering”).

On July 25, 2017, Iridium Satellite and Thales Alenia Space France (“Thales”) entered into Amendment No. 29 to amend the Full Scale System Development Contract No. ID-10-021 between Iridium Satellite LLC (“Iridium Satellite”), the Company’s indirectly wholly owned subsidiary, and Thales (“FSD Contract”). to Amendment No. 29, Iridium Satellite and Thales incorporated certain terms and arrangements into the FSD Contract relating to the deferment of certain milestone payments amounting to $100,020,612 (“Deferred Milestones”), and set up a mechanism for deferral whereby Iridium Satellite, in consideration of the deferral of its payment obligations in relation to the Deferred Milestones, accepted bills of exchange (“Bills of Exchange”). The Bills of Exchange have a maturity date of March 31, 2019, and each has a face value equal to the value of the corresponding milestone plus interest through the maturity date.

A portion of the proceeds of the Offering will be used to prepay the outstanding Bills of Exchange. Accordingly on March 9, 2018, Iridium Satellite and Thales entered into an agreement to amend the FSD Contract (“Amendment 32”), to which, Iridium Satellite and Thales will unwind the changes made in Amendment No. 29. The amendment will become effective upon the receipt of proceeds from the Offering and the repayment of all outstanding amounts under the Bills of Exchange with a portion of the proceeds. In addition, a portion of the proceeds of the Offering will be used to pay the deferred milestone payments which were not, as of March 9, 2018, subject to Bills of Exchange.

Item 1.01. Regulation FD Disclosure.

In connection with the Offering, the Company informed potential investors that the Company, Iridium Satellite and certain other subsidiaries of the Company expect to enter into an agreement (the “Supplemental Agreement”) with Société Générale, as BPIAE Agent, and the other lenders under its existing $1.8billion credit facility, which the Company originally entered into in October2010 with a syndicate of bank lenders, and most recently amended and restated in July 2017 by a supplemental agreement (as amended to the date thereof, the “Credit Facility”), and under which Iridium Satellite is the borrower, and the Company and certain of its direct and indirect subsidiaries are guarantors. to the Supplemental Agreement, the parties thereto will agree to, among other things, further amend and restate the Credit Facility (the “Credit Facility Amendment”), which will become effective upon the issuance of the Notes. A portion of the proceeds of the Offering will be used to fund approximately $87.0million into the debt service reserve account under the Credit Facility.

to the terms of the Credit Facility Amendment, the lenders under the Credit Facility will agree to (i)allow the Company to conduct the Offering, (ii)delay a portion of the principal repayments scheduled under the Credit Facility for 2018, 2019 and 2020 into 2023 and 2024 to an amended repayment installment schedule, (iii)after funding of the debt service reserve account back to $189.0million,allow Iridium Satellite to access up to $87.0million from the debt service reserve account under the Credit Facility in the future if Iridium Satellite’s projected cash level falls below $75.0million, and (iv)adjust Iridium Satellite’s financial covenants, including eliminating current covenants that require Iridium Satellite to receive cash flows from hosted payloads and adding a covenant that requires Iridium Satellite to receive $200.0 million in hosting fees from Aireon LLC prior to December 2023. Under the Credit Facility Amendment, in the event that (a)Iridium Satellite receives hosting fees from Aireon LLC or (b)Iridium Satellite’s cash balance exceeds $140.0million after September30, 2019 (subject to specified exceptions), Iridium Satellite would be required to use such hosting fees or excess cash (including up to $200.0million of hosting fees) to prepay the Credit Facility. In addition, to the Credit Facility Amendment, if any Notes remain outstanding six months prior to the maturity of the Notes, the maturity of all amounts remaining outstanding under the Credit Facility would be accelerated from September30, 2024 (which is the date falling seven years after the commencement of principal repayments under the terms of the Credit Facility) to six months prior to the maturity of the Notes.

The information contained in this Item 1.01 is not filed for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not deemed incorporated by reference by any general statements incorporating by reference this report or future filings into any filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates the information by reference. By including this Item 1.01 disclosure in the filing of this Current Report on Form 8-K and furnishing this information, we make no admission as to the materiality of any information in this report.

On March 9, 2018, the Company issued a press release to Rule135c under the Securities Act regarding the Offering. A copy of the press release is attached hereto as Exhibit 99.1.

Item 1.01 Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits:

Exhibit No.

Description

99.1 Press Release.


Iridium Communications Inc. Exhibit
EX-99.1 2 d548836dex991.htm EX-99.1 EX-99.1 Exhibit 99.1   PRESS RELEASE For Immediate Release IRIDIUM COMMUNICATIONS INC. ANNOUNCES PROPOSED PRIVATE OFFERING MCLEAN,…
To view the full exhibit click here

About Iridium Communications Inc. (NASDAQ:IRDM)

Iridium Communications Inc. is a satellite communications company that offers mobile voice and data communications services. The Company utilizes mesh architecture to route traffic across its satellite constellation using radio frequency crosslinks between satellites. Its lines of business include land mobile, machine to machine, maritime, aviation and government. Its commercial services include postpaid mobile voice and data satellite communications services; prepaid mobile voice satellite communications services; broadband data services; machine-to-machine services; Iridium push-to-talk service, and other services. It provides services to businesses, the United States and foreign governments, non-governmental organizations and consumers. The Company sells its products and services to customers through a wholesale distribution network of approximately 75 service providers, approximately 200 value-added resellers and over 45 value-added manufacturers.

An ad to help with our costs