ORBCOMM (News - Alert) Inc has signed a Senior Secured Note Agreement with AIG Asset Management (U.S.), LLC. According to the contract, AIG will offer a loan valid for five years and amounting to $45 million to ORBCOMM. The loan will be repayable at a fixed interest rate of 9.5 percent.
ORBCOMM will be allowed to pay back the loan on a quarterly basis for a period of five years. As per the conditions stipulated in the Note Agreement, ORBCOMM is provided the option to prepay the Notes, either in part or completely, at whatever time before to the maturity date.
The AIG financing will be utilized by ORBCOMM to assist its expansion opportunities like unveiling new services, product offerings, geographic division and possible purchases into major vertical markets. The organization will also be offered a capital expenses backup by the financing.
In a statement, Marc Eisenberg, CEO, ORBCOMM said, "We are pleased to have additional financing available to pursue strategic growth opportunities while at the same time preparing for the launch of our next generation OG2 satellites. We plan to use the proceeds of this transaction toward OG2-related growth opportunities, including enhanced products and services. In addition, we will look at further acquisitions within key vertical markets and geographies that will take advantage of the advanced capabilities of our OG2 satellites."
The OG2 satellites are expected to be launched by ORBCOMM on two premeditated Falcon 9 launches, the initial in mid-2013 and the subsequent in 2014. ORBCOMM's clients in major vertical markets like heavy equipment, transportation, maritime, agriculture, oil & gas, energy & utilities, and government are exclusively provided the OG2 constellation. The quicker communications speeds, enhanced coverage, boost in allowable message sizes, superior power management, and other features can be leveraged by clients of ORBCOMM.
A part of the financing will be used by ORBCOMM to repay its current debt of $3.5 million sustained during the purchase of StarTrak. ORBCOMM will conclude the current $20 million credit facility with satellite vendor Sierra Nevada Corporation as part of the latest contract.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Brooke Neuman