LightSquared chief Falcone to step down, buys time for 4G
updated 05:20 am EDT, Mon April 30, 2012
LightSquared chief Falcone may
LightSquarted chief Philip Falcone is said to be stepping down from his position in order to buy time for his hedge-fund Harbinger Capital’s ambitious satellite-powered 4G LTE network. The concession could be enough to avert the likelihood that LightSquared will default on its debts, reports The Wall Street Journal. If supported, LightSquared’s lenders will agree to a one extension of its $1.6 billion in loans that expire on Monday morning.
The agreement would be enough for LightSquared to avoid being forced to file for bankruptcy. According to Reuters, Falcone is perceived as an obstacle in LightSquared’s delicate negotiations with the FCC and others opposed to LightSquared’s technology. Tests conducted by the FCC suggested that LightSquared’s 4G service would interfere with Global Positioning Systems, which resulted in it revoking its conditional permission for its network rollout.
Falcone had previously indicated that he was prepared to put LightSquared into voluntary bankruptcy. Although Harbinger Capital has sunk an estimated 60 percent of its $3.8 billion in funds into LightSquared, it would still have tangible assets in the network spectrum that it had already purchased as part of the company's 4G rollout plans.
LightSquared’s future lies in its ability to overcome the FCC’s concerns about GPS interference. With the extra time Falcone has bought by standing down, it is hoped that LightSquared can buy an extra 18 months to two years to convince authorities that its network is safe to operate.
