The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011.
Credit: Reuters/Rick Wilking
By Caroline Humer and Nick Brown
NEW YORK | Tue Jun 14, 2011 7:26pm EDT
(Reuters) - Bankrupt telecommunications company Terrestar Networks Inc TSTRT.UL is nearing a minimum bid agreement of $1.2 billion to $1.4 billion, likely with billionaire Charlie Ergen, chairman of Dish Network Corp (DISH.O), according to sources with direct knowledge of the situation.
Ergen, who also controls EchoStar Corp (SATS.O), has been competing against other interested bidders, including a group of senior noteholders and wireless communications company MetroPCS Communications Inc (PCS.N), sources said.
A MetroPCS spokesman said the company had no comment.
The noteholder group, made up of holders of TerreStar's 15 percent senior secured notes, is made up of several investment funds, including Solus Alternative Asset Management, Archer Capital Management LP and Redwood Capital Group LLC, according to court papers.
Terrestar, which filed for bankruptcy in October, faces a Wednesday deadline for bids. Its most sought-after assets include wireless airwaves, which enable wireless service providers to offer services.
A Terrestar spokeswoman declined to comment. A spokesman for Dish declined to comment. Representatives for EchoStar were not immediately available for comment.
The negotiations on the agreement were extended and have continued after Terrestar moved the bid deadline in its auction from June 8 to June 15, saying that it needed more time to negotiate a stalking horse offer. Its auction is slated to be held on June 22, with a sale hearing scheduled for June 28.
Those dates may have to be pushed back again, however, according to sources. If the company reaches a stalking horse agreement, it will need additional time to make that offer public, they said.
This is the third trip this year back to bankruptcy court for Ergen, whose Dish business already agreed to buy similar assets for $1.4 billion from bankrupt DBSD North America in March. Dish also bought Blockbuster Inc (BLOAQ.PK) in April in a bankruptcy auction.
EchoStar, which is also a creditor of Terrestar's, had a proposed debt-for-equity deal in place earlier this year but walked away from it in February shortly after announcing another telecom deal to buy broadband services provider Hughes Communications Inc HUGH.O for $1.33 billion.
(Additional reporting by Megan Davies and Matt Goldstein; editing by Andre Grenon, Gary Hill)
Credit: Reuters (www.reuters.com)
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