Globalstar posts loss, replaces CEO

(Telephony) Globalstar, the financially distressed satellite communications firm formed by a partnership among Qualcom, Loral Space & Communications and others, posted a net loss of $138.1 million, or $2.25 per ordinary partnership interest for its first quarter 2001.

The loss per share for Globalstar Telecommunications, the portion of the company that is publicly traded, was 31 cents.

The results from the company were accompanied by the announcement that Bernard Schwartz, its chairman and CEO, has stepped down from those posts. Schwartz will continue as a member of Globalstar’s General Partner Committee and as a director of Globalstar Telecommunications Limited. Replacing him is Olof Lundberg, former CEO of Inmarsat and ICO Global Communications. It will be Lundberg’s task to lead the company through restructuring, the exact form of which is currently undetermined.

As this situation stands now, though, Globalstar has enough funding to carry it through to the end of the year, a deadline that was reached by suspending principal and interest payments on all of it funded debt, including its credit facility, vendor financing and senior notes. However, by suspending payments, the company has defaulted or is on the verge of defaulting on four loans.

“[The change in leadership] is a natural extension of restructuring,” said Mac Jeffery, senior director of communications for Globalstar. “One thing you want to do is bring in new expertise who can bring extra talent to the restructuring.”