UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
November 18, 2004 (November 12, 2004)
SkyTerra Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-13865 23-2368845
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
19 West 44th Street, Suite 507, New York, New York 10036
(Address of principal executive offices, including zip code)
(212) 730-7540
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 2 - Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets
On November 12, 2004, MSV Investors, LLC, an 80% owned subsidiary of
SkyTerra Communications, Inc. (the "Company"), entered into a series of
agreements pursuant to which it converted its Mobile Satellite Ventures, LP
(the "MSV Joint Venture") convertible promissory notes in the principal amount
of $51 million into 22% of the limited partnership interests of the MSV Joint
Venture and corresponding shares in the corporate general partner of the MSV
Joint Venture on an undiluted basis, at their original conversion price of
$6.45 per unit (the "Conversion"). The parties to the agreements include the
Company, Motient Ventures Holdings, Inc., a subsidiary of Motient Corporation,
TMI Communications Delaware, Limited, a subsidiary of Bell Canada, and
certain unaffiliated third parties. The Conversion occurred in connection with
a $230 million financing by the MSV Joint Venture in which it raised $145
million in cash by selling partnership units for $29.45 per unit and exchanged
or converted approximately $85 million of debt securities, including the
convertible note held by MSV Investors, LLC. MSV Investors, LLC originally
purchased the convertible notes in November 2001 ($50 million) and August 2002
($1 million).
As a result of these transactions, MSV Investors, LLC also received
approximately $17 million in cash from the MSV Joint Venture to pay the
accrued interest on the convertible notes. MSV Investors, LLC has distributed
approximately $14 million of this cash to the Company and $3 million of cash
to the unaffiliated third parties who own the 20% minority interest.
The Company is an active participant in the MSV Joint Venture and
appoints three of the 13 members of the board of directors of its corporate
general partner. MSV Investors, LLC and the other members of the MSV Joint
Venture have agreed that the acquisition or disposition by the MSV Joint
Venture of its assets, certain acquisitions or dispositions of a limited
partner's interest in the MSV Joint Venture, subsequent investment into the
MSV Joint Venture by any person, and any merger or other business combination
of the MSV Joint Venture, are subject to the control restrictions contained in
the Amended and Restated Limited Partnership Agreement and the Amended and
Restated Stockholders Agreement. The control restrictions include, but are not
limited to, rights of first refusal, tag along rights and drag along rights.
Many of these actions, among others, cannot occur without the consent of the
majority of the ownership interests of the MSV Joint Venture. In addition, MSV
Investors, LLC and two of the three other joint venture partner groups have
entered into a voting agreement pursuant to which three of the four joint
venture partner groups must consent to certain transactions of the MSV Joint
Venture or none of the parties to the voting agreement will support such
actions.
The MSV Joint Venture is a provider of mobile digital voice and data
communications services in North America. Last week, the MSV Joint Venture
received approval from the Federal Communications Commission (the "Approval
Order") to operate a terrestrial wireless infrastructure in support of a
satellite voice and data network (called an ancillary terrestrial component or
ATC). The proceeds from the transactions related to the Conversion will allow
the MSV Joint Venture to aggressively continue the development and testing of
its next-generation wireless communications network.
Following the Conversion, the Company will account for its interest
in the MSV Joint Venture under the equity method, whereby the Company will
record its proportionate share of the MSV Joint Venture's operating results.
The business conducted and proposed to be conducted by the MSV Joint
Venture involves a high degree of risk, including, among other risks,
potential challenges to the Approval Order and challenges in addressing the
limitations and conditions set forth therein. There can be no assurances that
the conditions will be satisfied by the MSV Joint Venture, or that the
limitations will not prove to be unduly burdensome. In addition, there can be
no assurances that the MSV Joint Venture will be able to obtain the additional
financing necessary to implement its business plan or otherwise find a
suitable strategic partner on satisfactory terms.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(a) Financial statements of business acquired.
The financial information required by this Item 9.01(a) will be filed
by an amendment to this Form 8-K not later than 71 days after the date that
this report was required to be filed.
(b) Pro forma financial information.
The financial information required by this Item 9.01(b) will be filed
by an amendment to this Form 8-K not later than 71 days after the date that
this report was required to be filed.
(c) Exhibits.
Number Description
------ -----------
2.1 - Note Exchange and Conversion Agreement, dated as of
November 12, 2004, by and among MSV Investors, LLC,
Mobile Satellite Ventures LP, et al.
10.1 - Amended and Restated Limited Partnership Agreement,
dated as of November 12, 2004, by and among MSV
Investors, LLC, Mobile Satellite Ventures LP, et al.
10.2 - Amended and Restated Stockholders Agreement, dated as
of November 12, 2004, by and among MSV Investors,
LLC, Mobile Satellite Ventures GP Inc., et al.
10.3 - Second Amended and Restated Parent Transfer/Drag
Along Agreement by and among SkyTerra Communications
et. al.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
SKYTERRA COMMUNICATIONS, INC.
(Registrant)
DATE: November 18, 2004 By: /s/ Robert C. Lewis
----------------------------
Name: Robert C. Lewis
Title: Senior Vice President and
General Counsel