Loral Bids to Up Satellite Shares

Loral Space & Communications Ltd. said Friday it offered to increase its stake in the Globalstar satellite partnership to 42% for as much as $420 million and then sell half of the newly acquired shares to billionaire money manager George Soros.

Loral said it offered to buy the equivalent of 8.4 million shares of Globalstar Telecommunications Ltd. for $50 each from its partners. Those who accept the offer will be required to put up half of their proceeds, or up to $210 million, to finance companies that offer the worldwide telecommunications service.

Loral is bulking up its stake in the satellite-based telecommunications network as the partnership prepares for the launch of its worldwide satellite service next year.

The offer allows some partners, who have been hurt by economic turmoil in Southeast Asia, to get some cash for portions of their stakes in the $2.7-billion system of satellites that will provide telephone service worldwide.

The owners of New York-based Globalstar include Qualcomm Inc., Alcatel Alsthom, Hyundai Corp., AirTouch Communications Inc., Daimler-Benz Aerospace and China Telecom Ltd., as well as Loral.

Under the agreement, Soros funds will buy back half of Loral’s newly acquired shares for $58.33 a share.

Loral plans to pay for the offer by selling 16 million of its shares, or less than 5% of its shares outstanding, for about $500 million.

Loral now owns about 38% of New York-based Globalstar. The transaction would give Soros a 4% stake.

Globalstar shares rose $1.50 to close at $69.63 on the Nasdaq. Loral was unchanged at $31.75 on the New York Stock Exchange.