Sunday, 29 May 2016
Last updated 2 days ago
Mar 19 2012 | 11:31am ET
The good news for Harbinger Capital Partners' cash-strapped wireless Internet venture is that it has another $65 million with which to stave off bankruptcy. The bad news: It's the price for losing its most important customer.
As expected, Sprint Nextel Corp. ended its network-sharing agreement with LightSquared last week. Under that $13.5 billion deal, Sprint was to build and operate the LightSquared network. But earlier this year, the Federal Communications Commission said it would revoke LightSquared's preliminary approval due to concerns that its network would interfere with global positioning systems.
LightSquared tried to put a brave face on the Sprint decision, saying the refunded $65 million—Sprint kept $236 million it had already been paid by LightSquared—gives it "more flexibility." The company has vowed to fight for survival and seek to overturn the FCC decision.
Harbinger has invested more than half of its assets in LightSquared, which recently cut almost half of its staff and replaced its CEO.