Ligado Networks has filed for Chapter 11 bankruptcy restructuring and reached an agreement with AST SpaceMobile to grant access to its mid-band spectrum.
AST SpaceMobile has announced an agreement for long-term access to up to 45 MHz of lower mid-band spectrum in the United States for direct-to-device satellite applications.
This agreement, when consummated, will add additional capabilities to AST SpaceMobiles technology and space-based network, based on the largest-ever communications arrays deployed in low Earth orbit, pairing existing plans for the continental United States on low-band spectrum, which offers superior penetration and coverage characteristics, with access to up to 45 MHz of lower mid-band spectrum, the largest available block of high-quality nationwide spectrum in the United States.
Abel Avellan, Chairman and CEO at AST SpaceMobile, said: Adding premium lower mid-band spectrum access in the United States to the AST SpaceMobile network gives us long-term access to a large block of a scarce resource, significantly enhancing our planned space-based cellular broadband offering. Alongside the previously announced 850 MHz nationwide network plans, access to the largest available block of high-quality nationwide spectrum will position us to deliver on our goal of peak data transmission speeds up to 120 Mbps, together with our mobile network operator partners, to enable a true broadband experience directly from space to everyday smartphones.
The binding Restructuring Support Agreement among Ligado Networks (Ligado), holders of approximately 88% of the funded indebtedness of Ligado, and AST SpaceMobile provides that, as part of Ligados ongoing restructuring, AST SpaceMobile will receive long-term spectrum usage rights for 80+ years to up to 40 MHz of L-Band MSS spectrum in the United States and Canada held by Ligado, plus access to an additional 5 MHz in the 1670-1675 MHz Band in the United States (the Transaction). The Transaction is subject to the entry into definitive documentation, which is expected to occur during the first half of 2025.
Upon execution of definitive documentation, Ligado will receive approximately 4.7m penny warrants convertible into AST SpaceMobile Class A shares, subject to a 12-month lock-up. Upon closing of the Transaction, which will be subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, and other closing conditions, Ligado will receive additional consideration of approximately $550m. To support this consideration, AST SpaceMobile has received a $550m institutional financing commitment, to finance a planned wholly owned special-purpose vehicle (SPV) in the form of a non-recourse senior-secured delayed-draw term loan facility, subject to satisfactory diligence and customary closing conditions. Upon closing of the Transaction, AST SpaceMobile would further pay approximately $80m annually for spectrum usage rights and provide Ligado with long-term net revenue sharing rights. The closing of the Transaction will be subject to the satisfactory conclusion of Ligados restructuring.
