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Gilat Satellite Networks said that its largest banking creditor, and bondholders holding a majority of the $350 million in company debt due 2005, have agreed to commence negotiations on how to restructure the company's debt.
The satellite company, best known for its Starband consumer satellite broadband service and its VSAT business, said the negotiations will be based on certain agreed guidelines that will include concessions from its creditors and lenders. The guidelines also anticipate that a certain portion of the principal of the company's debt to the bank will be deferred by a few years and that the remaining debt will be converted into equity and new convertible bonds.
Yoel Gat, Gilat chairman and CEO, said he expects the company's debt level to be reduced by approximately $300 million by converting a substantial amount of debt to equity or options to acquire equity in the company. He added that post restructuring financing costs are expected to be relatively minimal (less than $5 million cash per year) for the first few years.
From SkyReport (Used with Permission)
The satellite company, best known for its Starband consumer satellite broadband service and its VSAT business, said the negotiations will be based on certain agreed guidelines that will include concessions from its creditors and lenders. The guidelines also anticipate that a certain portion of the principal of the company's debt to the bank will be deferred by a few years and that the remaining debt will be converted into equity and new convertible bonds.
Yoel Gat, Gilat chairman and CEO, said he expects the company's debt level to be reduced by approximately $300 million by converting a substantial amount of debt to equity or options to acquire equity in the company. He added that post restructuring financing costs are expected to be relatively minimal (less than $5 million cash per year) for the first few years.
From SkyReport (Used with Permission)
