Harbinger Selling Large Stake in Inmarsat

Harbinger Capital Partners will sell a large chunk of its stake in Inmarsat and is no longer interested in acquiring the company, the private investment firm said Monday. Harbinger sought to buy in 2008 but pulled back after regulatory hurdles proved too high. The firm, which owns 28 percent of Inmarsat, didn’t give a reason for the sell-off. Harbinger’s LightSquared separately said it would accelerate plans to use Inmarsat spectrum for its wholesale terrestrial wireless network based on early demand.

Harbinger said it will sell 60 million Inmarsat shares, about 13 percent of those available in the company and almost half its Inmarsat holdings. The shares are worth around $616 million, based on Inmarsat’s recent stock price on the London Stock Exchange. Harbinger said its remaining shares will “be subject to certain lock-up arrangements” with Credit Suisse and UBS Investment Bank.

Inmarsat “has been a terrific investment for Harbinger and its investors,” Harbinger head Phillip Falcone said. “Although we have determined that we are not going to make an offer for all of the company, I remain a strong believer in Inmarsat’s future and am extremely happy to maintain a core position in the company’s stock and our partnership with Inmarsat through LightSquared.”

LightSquared announced it will pay Inmarsat an additional $115 million yearly for the use of 20 MHz of Inmarsat spectrum to keep up with growing demand for its wholesale wireless services it will offer. The new spectrum will become available to LightSquared under an agreement that’s been in effect between Inmarsat and LightSquared, then called SkyTerra, since 2007. Inmarsat will have to begin clearing about 20 MHz of spectrum once it receives notice from LightSquared, probably in the fourth quarter, LightSquared said. LightSquared started the first phase of the process in August and will pay $337.5 million total for access to the 10 MHz of spectrum involved. After the first two phases are completed, LightSquared will have 40 MHz spectrum for its service. LightSquared has signed two agreements and is in advanced negotiations with 11 companies, a spokesman said.

LightSquared also said it closed on $850 million worth of debt arranged by UBS, giving the company an aggregate $2 billion in equity, debt and commitments. The new funding will help as LightSquared works to meet deployment requirements set by the FCC. The commission signed off on Harbinger Capital Partner’s acquisition of SkyTerra (CD March 30 p1) based on a commitment to build out its network to at least 100 million people before 2013 and 260 million before 2016.