A judge on Thursday approved TerreStar Networks Inc's proposed $1.375 billion sale to Dish Network Corp, pushing the satellite communications company a major step closer to emerging from a 9-month stint in bankruptcy.
The sale has the support of TerreStar's creditors. TerreStar had more than $1 billion of debt when it sought Chapter 11 protection last October.
Congratulations on a good result, Judge Sean Lane said at a hearing in U.S. Bankruptcy Court in Manhattan.
TerreStar, which tried to market the first satellite smartphone, had been coveted for its roughly 20 megahertz of spectrum.
The sale price rivaled the $1.4 billion Dish plans to pay for bankrupt land-based communications company DBSD North America, which won court approval last week.
Dish had put forth a $1.375 billion minimum, or stalking horse, bid for TerreStar on June 15. No rival bids were submitted.
The deal represents at least the fourth major purchase in 2011 for billionaire Charles Ergen, who controls Dish, and the third for Dish itself.
Ergen's set-top box maker EchoStar Corp bought Hughes Communications Inc for $1.33 billion, while Dish also bought bankrupt the assets of Blockbuster Inc, a $320 million deal that closed in April.
While some analysts have speculated about Ergen's plans for his burgeoning satellite empire, Ergen has not signaled his plans for his newest assets, particularly Blockbuster, a once-dominant video retailer.
SALE OVER RESTRUCTURING
TerreStar began pursuing an asset sale in April after a proposed debt-for-equity restructuring deal with EchoStar, its largest secured creditor, fell apart.
Arik Preis, a lawyer for TerreStar, said he is happy with how the deal came together.
When we started, everyone was objecting to everything we did, and now we're at the point where we have a deal and no one's objecting, Preis said.
The all-cash deal was attractive to TerreStar in part because it provided enough money to let the company pay down its secured debt, according to Preis.
TerreStar filed court papers on Wednesday asking Lane to let it repay $1.26 billion owed to secured creditors before the end of September, rather than wait until the deal closes and incur interest at the rate of $46 million a quarter.
The case is in re: TerreStar Networks Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-15446.
(Reporting by Nick Brown; Editing by Richard Chang)