LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital, reports Reuters.
“There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity,” the company’s statement said.
A spokesman for LightSquared said the company “has cash through the next several quarters.” A person familiar with LightSquared said the company does not need any additional money until the FCC rules on a company plan for dealing with potential interference issues.
It is not clear when the FCC will rule. U.S. Regulators are still reviewing LightSquared’s LTE network to determine the extent of interference problems and won’t allow the company to deploy without approval
The satellite phone company hopes to use its frequencies for terrestrial LTE, but has run into serious GPS interference issues. It has $4.64 billion in assets with their nationwide 1.6 GHz licenses valued at $2.44 billion.
Philip Falcone gained fame after making billions in 2007 by shorting subprime mortgages. A failure of LightSquared would be another jolt to investors in Falcone’s hedge fund, which has committed more than $3 billion in equity and loan commitments to the company, reports Reuters. Lightsquared’s financial statement paints a fairly bleak outlook for the Reston, Virginia-based company.
Lightsquared said it expects guidance from the FCC by year’s end on its proposed terrestrial wireless network. Few industry observers expect good news.
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