LightSquared’s problems continue to mount
According to reports, LightSquared will need to raise $3.5 billion over the next two years in order to keep a favourable balance sheet ahead of its ambitious plan to roll out a 4G-LTE network across the US.
The company has insisted it has the financial strength to construct the 40,000 bases station required to create a network that provides coverage to 92% of the US by 2015.
LightSquared is owned by billionaire hedge fund manager Phil Falcone, who said he was “absolutely confident” the company can raise the required capital.
Meanwhile, the company could be facing fresh tension in its regulatory battle with the global positioning system (GPS) industry and the Federal Communications Commission (FCC).
The Iowa republican senator Charles Grassley, who sits on the US Senate Judiciary Committee, has made a request for a record of contact between Falcone’s hedge fund Harbinger Capital Partners and the White House and US regulators to be made public. According to the Wall Street Journal, this follows suggestions from public interest groups and politicians that the company tried to improperly influence regulators.
Questions have been raised over whether contributions made to Democratic candidates and groups by Falcone and LightSquared’s chief executive Sanjiv Ahuja played a part in the FCC’s decision to allow LightSquared to proceed with its plans.
LightSquared officials have reportedly denied the company has benefited from favouritism or attempted to influence regulators.