Press Release Source: SkyTerra Communications, Inc.
SkyTerra Communications Acquires Remaining Interest in Hughes Network
Systems LLC from The DIRECTV Group
Tuesday January 3, 3:18 pm ET
NEW YORK—(BUSINESS WIRE)—Jan. 3, 2006—SkyTerra Communications,
Inc. (OTCBB: SKYT - News) announced today that its wholly owned subsidiary,
Hughes Communications, Inc. (Hughes), completed the previously announced
purchase of the remaining 50 percent of Hughes Network Systems, LLC
(HNS) from The DIRECTV Group, Inc. (NYSE:DTV - News) for $100 million
in cash. To finance the transaction, Hughes borrowed $100 million from
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P.,
(Apollo), stockholders of SkyTerra. Concurrently, with the closing,
HNS paid DIRECTV $10 million to resolve certain post-closing adjustments
related to the initial purchase by SkyTerra of its 50 percent interest
Prior to the transactions, SkyTerra completed its previously announced
internal restructuring by transferring substantially all of its assets
and liabilities other than its interest in the MSV Joint Venture, Terrestar
Networks, Inc. and certain designated cash, to Hughes, which SkyTerra
has announced it expects to distribute to its stockholders as part
of a special dividend distribution during the first quarter of 2006.
with the special dividend, Hughes is expected to conduct a rights offering
to its stockholders in order to repay the loan from Apollo. In connection
with such a rights offering, Apollo has agreed to subscribe for the
maximum amount of shares of common stock allocated to it, including the
of pro rata over-subscription rights. The exercise by Apollo of its
rights would occur by converting the unpaid principal and interest under
Apollo loan into a number of shares of common stock based on the subscription
price in the rights offering, which has not yet been determined. The
unconverted principal and interest obligations would be repaid in cash
immediately following the consummation of the rights offering.
The special dividend and the expected rights offering are subject to
a number of conditions including clearance from the Securities and Exchange
Commission, final approval and the setting of a record date by SkyTerra's
Board of Directors, and the setting of a record date and subscription
price for the rights offering by Board of Directors of Hughes.
A registration statement relating to the common stock issuable in connection
with the rights offering has been filed with the Securities and Exchange
Commission but has not yet become effective. These securities may not
be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective.
The prospectuses relating to the common stock issuable in connection
with the rights offering may be obtained, when available, by contacting
Robert C. Lewis, c/o Hughes Communications, Inc., 19 West 44th Street,
Suite 507, New York, New York 10036.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act, with respect
plans and other future event relating to SkyTerra and its subsidiaries,
including Hughes Communications, Inc. Such statements generally include
words such as could, can, anticipate, believe, expect, seek, pursue,
proposed, potential and similar words and terms, in connection with any
discussion of future results, including SkyTerra's plans to distribute
the special dividend, or the completion of the potential rights offering
and other transactions referred to in this press release. Forward-looking
statements involve a number of assumptions, risks, and uncertainties,
any of which may cause actual results to differ materially from the anticipated,
estimated, or projected results referenced in the forward-looking statements.
In particular, the forward-looking statements of SkyTerra are subject
to the following risks and uncertainties: difficulties, delays, unexpected
costs or the inability to consummate, the special dividend, the rights
offering or the other transactions referred to in this press release;
the impact of legislative and regulatory actions, including without limitation,
actions by the Securities and Exchange Commission and the foreign regulatory
authorities. We assume no obligation to update or supplement our forward-looking
SkyTerra Communications, Inc.
Robert Lewis, 212-730-7540
Source: SkyTerra Communications, Inc.