Wireless company Ligado Networks files for bankruptcy after the U.S. government blocks its 5G expansion plans, citing interference with military GPS systems.
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| Ligado Networks Seeks Chapter 11 Protection. Symbolic Image |
Delaware, USA– January 7, 2025:
Wireless network company Ligado Networks LLC filed for Chapter 11 bankruptcy on Sunday, seeking to restructure a massive $7.8 billion debt load.1 This drastic move follows years of legal battles with the U.S. government, which has consistently blocked the company's plans to expand its mobile 5G network into a new spectrum.
The crux of the issue lies in potential interference with military GPS systems.3 Despite receiving a permit from the Federal Communications Commission (FCC) in 2020, the Department of Defense (DoD) intervened, arguing that Ligado's proposed 5G network would disrupt critical military operations.4 This government opposition effectively halted Ligado's expansion plans, crippling the company's revenue projections and leading to a mounting debt burden.
To navigate this financial crisis, Ligado has secured an agreement with its lenders.6 A significant portion of the $7.8 billion debt, amounting to $7.8 billion, will be converted into equity shares.7 This strategic maneuver aims to substantially reduce the company's overall debt to a more manageable $1.2 billion.
Despite the bankruptcy filing, Ligado emphasizes that its core operations, including its crucial mobile satellite services, will continue uninterrupted. The company intends to utilize the Chapter 11 process to restructure its finances and emerge from this challenging period.
In a statement, Ligado President and CEO Doug Smith reiterated the company's commitment to vigorously pursue its legal claims against the U.S. government. Ligado maintains that the government's actions have unfairly impeded its business operations and deprived the company of billions in potential revenue.
The Defense Department has yet to issue a public statement regarding Ligado's bankruptcy filing.