AST SpaceMobile, Inc. (NASDAQ:ASTS), an innovator in space-based cellular broadband network deployment, has entered into a significant agreement with Ligado Networks LLC, securing long-term access to valuable mid-band spectrum in the United States. The deal was disclosed in a recent 8-K filing with the Securities and Exchange Commission.
On Monday, AST SpaceMobile's subsidiary, AST & Science, LLC, signed a binding Strategic Collaboration Term Sheet with Ligado Networks amid Ligado's Chapter 11 bankruptcy proceedings. This strategic partnership will allow AST SpaceMobile to enhance its pioneering space-based network with up to 45 MHz of lower mid-band spectrum, complementing its existing plans for low-band spectrum coverage across the continental U.S.
The agreement is contingent on the approval of the Bankruptcy Court and the successful restructuring of Ligado under a pre-arranged chapter 11 plan of reorganization. The consummation of this transaction will mark a significant expansion of AST SpaceMobile's capabilities, enabling direct-to-device satellite applications with the largest block of high-quality nationwide spectrum available in the U.S.
Under the terms of the agreement, AST & Science, LLC will receive rights to use Ligado's satellite and ground station assets, as well as the L-band spectrum. In return, Ligado LLC will receive approximately 4.7 million penny warrants in AST SpaceMobile, cash or stock payments totaling $550 million, annual payments for spectrum usage, and a share of revenue derived from the L-band spectrum's use in North America until December 31, 2107.
To facilitate this transaction, AST SpaceMobile has secured a $550 million institutional financing commitment for a non-recourse senior-secured delayed-draw term loan facility. This financial backing is subject to customary closing conditions, including due diligence and the absence of material adverse changes.
The transaction is also supported by a Restructuring Support Agreement between Ligado, certain creditors and equityholders, and AST, LLC. This agreement outlines the commitment of the parties to support Ligado's capital structure restructuring and the AST Transaction (JO:TCPJ). Ligado has also agreed to refrain from soliciting alternative commercial transactions, with a break-up fee of $200 million payable to AST SpaceMobile under certain conditions.
The news above is based on an SEC filing.
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