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Latest Satellite News Discussion, Update Worldspace pledges European assets at General Satellite News forum; Worldspace pledges European assets After the market closed on July 23 Worldspace issued its latest text on the long history ...

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Update Worldspace pledges European assets - 26-July-2008, 14:40

Worldspace pledges European assets

After the market closed on July 23 Worldspace issued its latest text on the long history of its borrowing obligations. It is heavily in debt to four bridging note-holders. The latest news, issued via a formal filing with the US Securities & Exchange Commission, is that it has pledged its European assets to the debt-holders.
Worldspaces Form 8-K to the SEC outlined that it had reached an agreement with its four bridge note loan holders that they would now wait until July 31 for the repayment of $19m plus another overdue $1m in past due interest.

Additionally, says the 8-K, under the terms of the Agreements, the Company also agreed, on or before July 29, 2008, to pledge up to 100% (but in no event less than 66 2/3%) of the equity interests of WorldSpace Europe Holdings ApS ("WorldSpace Europe") in favor of the collateral agent under the Bridge Loan Notes and Convertible Notes ("Collateral Agent"), for the benefit of the Investors. The Company also agreed to cause WorldSpace Europe to: (A) become a Guarantor, as defined in the security documents securing the Bridge Loan Notes and Convertible Notes (the "Security Documents"), by executing and delivering, to the extent legally permissible, a guaranty in favor of the Collateral Agent, for the benefit of the Investors, in form and substance reasonably acceptable to the Required Holders (i.e., the holders of a majority in interest of the Convertible Notes), (B) become a Pledgor (as defined in the Security Documents) by executing and delivering, to the extent legally permissible, a joinder to the security agreement, in form and substance reasonably acceptable to the Required Holders, pledging all of its assets in favor of the Collateral Agent, for the benefit of the Investors (C) pledge, to the extent legally permissible, its 65% equity interest in WorldSpace Italia SpA in favor of the Collateral Agent, for the benefit of the Investors.

Worldspace also agreed to pay $500,000 in regards to the note-holders fees and expenses. $250,000 was paid on July 21, and the rest is due by month-end.

The loans were sourced from Highbridge Capital Management (through Highbridge Intl LLC); OZ Management (through OZ Master Fund), Angelo, Gordon & Co (through AG Offshore Convertables) and Citadel Limited Partnership (through its Citadel Equity Fund).

One twist to the past few weeks activity, however, is in Worldspaces share price. Perhaps encouraged by the business at least in Europe falling by default into the hands of new owners, Worldspaces share price has boomed. It has shot up from around $1.60 a share to $3 during the week (and stood at $2.90 on July 23).
   
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