Globalstar, Inc. (GSAT) CEO Jay Monroe on Q2 2018 Results - Earnings Call Transcript
Globalstar, Inc. (NYSE:GSAT) Q2 2018 Results Earnings Conference Call August 2, 2018 5:00 PM ET
Kathryn Singer - IR
Jay Monroe - Chairman and CEO
Rebecca Clary - VP and CFO
Simon Flannery - Morgan Stanley
Jason Bernstein - Cantor
John Petrozzi - Muller Road Capital
Hello and welcome to Globalstar Incorporated Second Quarter 2018 Earnings Conference Call. My name is Michelle, and I will be your operator for today’s conference. At this time all participants are in a listen only mode. Later we will conduct a question and answer session. [Operator Instructions] Please note that today’s conference is being recorded.
I will now turn the call over to Ms. Kathryn Singer. Ma’am, you may begin.
Thank you, operator. Good afternoon, everyone. Thank you for joining us for today’s conference call to discuss Globalstar’s three month results for the period ended June 30, 2018. Before we begin, please note the following. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause results to differ materially are described in the safe harbor section of recent press releases and in Globalstar’s SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q.
In order to provide investors additional information, the press release and this conference call include discussions of certain non-GAAP financial measures. The press release provides a reconciliation of each of these non-GAAP measures to the most comparable GAAP measures in accordance with SEC rules.
Please note that the information in this call is accurate only as of today, Thursday, August 2, 2018. The second quarter 2018 press release that was issued this afternoon, which contains certain financial information is available on the company website at www.globalstar.com and has been submitted to the SEC on Form 8-K. Later today, an audio recording of this conference call will also be available via telephone dial-in and a webcast recording.
Today’s call is presented by Jay Monroe, Chairman and CEO. Joining Jay for the question-and-answer session will be Rebecca Clary, Vice President and CFO; and Tim Taylor, Vice President of Finance.
Now it’s my pleasure to turn the call over to Jay.
Thank you, everyone, for joining the call today. Rebecca and Tim are here to answer some of the questions during the Q&A portion, though Tim is remote from the office today. Due to the timing of the call relative to the events of this week, I’ll go through a short financial update before digging into the meat of the call.
Satellite fundamentals continue to improve. Revenue for the quarter increased by $5.6 million or 20% year-over-year. Service revenue was up 15% while equipment sales rose 50%. The new IoT solar-powered Simplex product has been a standout performer since the product launched earlier this year. And of the newly launched products, solar IoT has been the largest sales contributor. We expect SPOT X and Sat-Fi2 to improve as we get through their initial launch period.
The decrease in reported net loss during the quarter was primarily driven by a change in the noncash derivative loss of $75 million. Adjusted EBITDA increased 37% over this quarter in 2017 to 11.2 million driven by the operating leverage in the satellite business as an increasing revenue base is spread across a largely fixed cost OpEx structure. The team is working hard to drive EBITDA higher. And with the new products and services recently launched and many other initiatives completely incremental to the business today, we expect good things for the balance of the year.
And now for the part of the call that I’m sure everyone cares about most. Yesterday morning, we announced that by mutual agreement between Globalstar’s Special Committee of its Board of Directors and Thermo, the merger of Globalstar with FiberLight and other Thermo assets was terminated. While Globalstar is disappointed with this outcome, we are, nevertheless, appreciative of all the hard work of our team, the board, the Special Committee and various others on the outside, who put so much effort into this proposed transaction. The company remains convinced that the merger offered all shareholders significant upside and mitigated downside risk. The board plans to meet again promptly to determine next steps and consider all options available to the company to proceed on the path which the board believes is the best for all shareholders.
The Special Committee unanimously terminated due to multiple factors, including the sizeable cost of litigation to Globalstar to defend the merger; uncertainty related to the closing, including the timing of the closing; stock price volatility; and what appears to us to be a prolonged distraction for the management team, which could have a materially damaging impact on the company’s finances and operations. Despite the market reaction, our goal has always been to put Globalstar in a path we felt best positioned us for long-term success. Over the last 10 years, $1.4 billion has been raised and invested into the company, nearly half of which came from Thermo. To say Thermo has been committed is an understatement. Globalstar and the Special Committee saw the merger as a way to permanently address our significant long-term capital needs while creating a platform that should have been richly accretive to all shareholders over time as unique assets were combined with robust cash flow. We were excited by the many options, a larger diversified entity offered, including add-on opportunities that we believe would’ve been accretive from day one. For example, one business we have been doing due diligence on would have added $70 million to $90 million in free cash flow after synergies. This transaction could have been done entirely with post-merger available cash. The board will now look at the best options available to standalone Globalstar, and our management team and all employees remain fully motivated to drive increased value in our satellite and spectrum businesses.
As we look back a few months at the announcement of this transaction, I want to note that due to the nature and structure of the litigation to date, the information the market has received is one-sided. I’d like to use this opportunity to provide historical context to our shareholders, so we can better assess together our path forward. Regarding the valuation of FiberLight, which was a focus of much consternation, a few thoughts. We have more confidence in the valuation work of the 3 investment banks involved in these processes to drive a proper current valuation for FiberLight, supported by the analysis of specialized fiber consultants regarding FiberLight’s asset value than in news stories from 2011 and 2016 that were acknowledged not to have direct access to the basic FiberLight financial information.
After significant due diligence and detailed valuation work, all three investment banks and the consultants provided a valuation range which fell within this deal. The fact is FiberLight is a great company, and Thermo was happy to own and operate it. The FiberLight deal is compelling because it enjoys growth from all the principal drivers of the digital economy. Wireless carriers need fiber for back-haul. Tech giants need fiber to connect data centers, private cloud services, et cetera, while enterprises need fiber to leverage cloud services and provide data connectivity for their customers and employees. While there have been some disparaging narratives spun about certain numbers of the management team and the board, we assure our investors that these allegations are untrue, and these types of allegations are, unfortunately, common in litigation with activist shareholders as a standard litigation tactic.
We are and remain transparent about all aspects of the business, including our conversations with third parties to monetize our spectrum and our efforts to obtain global approvals for more spectrum use. We have always wanted a higher stock price because our preferred outcome has always been to monetize the spectrum on some basis, and a higher stock price establishes a higher starting point for any negotiation. Throughout this whole process, we have explained to counterparties how these assets can be utilized to create a disruptive wireless service. We continue with this effort today.
As we look forward to our alternatives, we know that any spectrum transaction is, obviously, at an unknowable future date. And yet, we have known liabilities to meet. Here are some context. Our efforts to monetize Globalstar spectrum began in earnest as far back as 2013. We hired Credit Suisse to help us, and we met with many potential partners at cable, wireless and technology companies. This was pre-SEC approval and, obviously, didn’t lead to a transaction. Yet, we were able to introduce our assets to parties during this period. Then in 2015, we formally engaged Allen and Centerview to help drive our strategic discussions. These are high-quality investment banks that were selected after a thorough competitive process.
This effort entered a new and much more aggressive phase in early 2017 after the December 16 FCC approval. However, being realistic about our impending capital needs, we began reviewing backup plans at that time, which included certain financing options as well as a potential merger with FiberLight, cash and other Thermo assets. It was proper for the board and the Special Committee to evaluate such alternative plans in case the strategic process was not successful as, ultimately, has proven to be the case. To that end, we formed a Special Committee of Globalstar’s independent board members to assess any transaction with Thermo, given the related party issues inherent in any such combination.
In the first half of 2017, the board and Thermo began formal discussions regarding a merger transaction, entirely subject to the outcome of the strategic process. This 2017 proposed merger contemplated Globalstar acquiring Thermo controlled assets and investments, including FiberLight; shares of Level 3, which has subsequently been acquired by CenturyLink, and cash. The board and management believe that this alternative transaction could provide the company with a set of valuable strategic assets as well as long-term stability and a permanent solution to the potential liquidity shortfalls the company projects. This combination was only to occur in the absence of a spectrum or other strategic transaction.
The committee took into account the potential to increase the probability of a spectrum-related transaction by improving the company’s balance sheet and allowing Globalstar to negotiate from a position of strength rather than a position of distress. As it considered these issues, the Special Committee always thought the alternative that would maximize the value for the company’s minority shareholders. The Special Committee also believed the merger, if completed, offer the ability to improve the company’s participation in the rapidly changing telecom environment, including the industry’s transition to 5G where fiber and spectrum together are becoming increasingly critical components of next-generation networks. These benefits are weighed against the near-term dilution to minority shareholders as compared to the long-term cost of engaging in future financings to address the company’s capital requirements in the absence of any spectrum transaction.
During this period in ‘17, the Special Committee and Thermo were unable to reach an agreement. So by September 2017, taking into account the need for the company to focus efforts on additional capital to be raised under the then recently signed bank amendment, and the continued effort of Allen and Centerview, the Special Committee determined that it was in Globalstar’s best interest to end the 2017 merger discussions with Thermo and to wind down the Special Committee. During the same period, and over the course of a multi-month strategic process, the company together with our advisors, Allen and Centerview contacted more than 30 parties, including the CEOs and leaders of the country’s largest telcos, MSOs and tech companies as well as financial parties.
During 2017, members of Globalstar’s senior management engaged in formal discussions with the senior officers of 20 of these companies, 12 of which executed nondisclosure agreements, pursuant to which they were provided additional access to detailed information about the company. This strategic process continued as these parties reviewed the regulatory and technical aspects of Globalstar’s U.S. spectrum as well as the prospects for the satellite business. Additionally, these parties conducted due diligence with respect to the company’s international spectrum position and prospects for further approvals. A diligence was largely focused on the technical capabilities of the company’s 2.4 gigahertz spectrum in the United States and its ability to provide network services aligned with business models being deployed or contemplated by the potential partners or acquirers.
Unfortunately, up to this point, none of the parties expressed an interest in the transaction while others indicated they had no interest in acquiring or controlling license spectrum generally. Still others stated a preference for different spectrum bands. Notwithstanding this feedback, the company has continued strategic outreach even through today as this has been and continues to be a preferred path. In early October 2017, Globalstar completed an equity offering for $119 million at a price of $1.65 per share underwritten by Morgan Stanley. Thermo participated in the financing and invested $44 million, bringing the total capital invested by Thermo at that point in 2017 alone to 77 million. Unfortunately, the Morgan Stanley process confirmed for some that the shorter-term spectrum transaction they had hoped for was not going to happen and, therefore, the market began to focus on Globalstar’s future capital requirements. The likely result of this focus was a deteriorating stock price from October 2017 through the end of the first quarter of 2018.
During the October financing, Thermo publicly disclosed that it intended to sell up to 38 million shares of high basis Globalstar stock, a tiny percentage of Thermo’s holdings, and that the sale could take place before yearend to offset taxable gains expected upon the completion of the merger between Level 3 and CenturyLink. So Thermo’s stock sale was no surprise. There was routine and intelligent planning that went into it. For the sale, Thermo had no incentive to reap a lower stock price per share because it has always been in Thermo’s best interest to have the highest Globalstar stock price for any strategic negotiation or transaction.
In January 2018, the board began to reconsider a version of the proposed merger with Thermo to complete a long-term solution, so the Special Committee was formed once again. In the same month, Globalstar’s management held initial meetings in Paris with its senior lenders to assess the lending syndicates due of a proposed merger and the bank group’s willingness to substantially amend the terms of the loan agreement to the benefit of the company, including the covenants, principal amortization reductions, interest cost reductions, among other loan agreement terms. The bank group conveyed a favorable reaction to the proposed merger and its positive impact on the credit profile of the company. The parties would eventually negotiate a favorable amendment providing significantly improved financial terms for our senior debt facility subject, unfortunately, to the closing of the merger.
The Special Committee was well versed on the combination assets, the fiber market, the relevant comps, the valuation analysis of the assets from the combination originally proposed in 2017, and they began conducting extensive additional due diligence with Mollis, who have been hired to be the Special Committee adviser and to offer a fairness opinion. Ultimately, this led to a valuation analysis that supported the transaction value after ascribing an appropriate multiple to FiberLight’s EBITDA, given prevailing industry transaction multiples, the value of the cash, the CenturyLink stock and a calculation of the economic split of the incremental present value associated with the net operating loss in certain estimated, but limited, cost synergies.
After months of negotiating and due diligence, the parties entered into an LOI and, eventually, into a merger agreement. Since the execution of the merger agreement, Allen and Centerview have continued to advise the company and the Special Committee in their pursuit of strategic alternatives, including the monetization of the spectrum assets as provided for in the merger agreement. Throughout this period, Allen and Centerview have contacted the principal parties that are believed to be potential strategic partners for the company across the wireless, cable and technology industries. Despite Allen and Centerview’s best efforts, they have not been successful through the date of today’s call.
Following the merger termination, the board of Globalstar and management remain committed to the success of the company and will do all within their power to maximize the long-term value for all stakeholders. This includes our shareholders and especially our employees, among others.
I’d like to turn the call over to the operator, please, to begin Q&A. Please use this opportunity to ask whatever questions you have.
[Operator Instructions] The first question in the queue comes from Simon Flannery from Morgan Stanley.
I wonder if you could start, Jay, just updating us on where the balance sheet stood at the end of June and what is the funding requirement that you need at this point. I think it’s at $40 million to $50 million back in February. Are we still in that sort of zip code? And how do you think about your options for doing that refinancing the balance sheet or some equity or some hybrid? And then coming back to the spectrum, perhaps you could go into a little more detail on the 3GPP process and the international angle. And I know with your Nokia study, there have been a lot of different things you could do with the spectrum that they had suggested. Where do you think the most likely path at this point is if monetization seems less likely?
Simon, it’s Rebecca. I’ll take your first question and then kick it off to Jay. So at the end of the quarter as far as our sources and uses of cash, you kind of have the numbers right, they haven’t moved around much. We have for sources of cash about $50 million, including cash on hand and projected operating cash flow. And as far as our usage of cash, it’s about $150 million, predominantly made up of P&I due in December and June. And then the balance is estimated CapEx predominantly, and then funding of our debt service reserve account. So some variability in those numbers, including primarily interest in CapEx. So as far as our funding gap, we are looking at about $50 million. And for easy math, you can think of it as $50 million every six months, coinciding with our debt service obligations in June and December of each year. And that’s for the next two years. And then at which point we lose the ability to cure our financial covenants through equity cure contribution. So our long-term plan is, for sure, to seek an amendment to take care of those uncertainties that arise predominantly in June 2020. And our lenders, as Jay alluded to earlier, were very supportive of the transaction. But nonetheless, we have a great relationship with them. I know going on 10 years that they’ve been our partners. And so we feel confident that we’ll be able to work something out with them in terms of resolving those uncertainties.
And improving operating cash flow from the core business, of course, helps. We’re materially improving quarter-over-quarter as you’ve seen from the remarks and in the earnings release. And that helps. But of course, that might move our funding gap from $50 million to $40 million or maybe even $20 million. But the gap still exists, and it’s something that we need to address. In the last 48 hours since the termination has been effective, we have reached out to our financial advisers and starting to think about what options makes sense in terms of what’s the best for the company and our shareholders. We’ll, of course, then engage in conversations with our lenders and our board to figure out the best path forward.
Okay. So no decision yet. And I know there have been some proposals by some minority shareholders about exactly what format it takes.
No decisions yet. I mean, of course, we haven’t had much time to react on that front. We’ve shown a history of doing different things in the debt and equity side. At our price today, it might be costly to the company, so we’re just going to figure out what makes the most sense.
Good. And on the spectrum, Jay?
Yes, Simon, I’ll group actually all three of those together, the 3GPP, international spectrum and Nokia. Obviously, the Nokia report is confirming what everybody really knows about the spectrum, which is that an independent, unencumbered spectrum band for small cell use indoors and outdoors is a terrific band because it has no interference from macro cellular infrastructure. Then so it’s compelling and interesting, and the Nokia report really kind of puts a punctuation at the end of that concept. That is very important to, of course, the 3GPP process as well. And Nokia has been very helpful, along with a few other companies, in advancing us through the 3GPP process. At this moment, we have working item status, and we will continue to push the 3GPP process to fruition whenever that occurs. It could happen this year, it could happen part of next year, who knows exactly. But that’s a very formalized process and one that you have to walk through. And we’re doing that methodically with an obvious end in sight. The approval of additional spectrum bands is something that we focus on every day. We have a team of people here in the company as well as consultants outside of the company that are pressing for a final approval in many jurisdictions. We have never made it a point of talking to people about the specific countries that we’re working in because there are so many of them, and it gets so confusing, and it becomes a bit of a time thing to go through it with people that call all the time. But suffice it to say that our low-marching army is out there working across the globe, and we anticipate having additional approvals announced here in the near term. It has taken us longer than we had hoped, no question about it, to get the first couple of them done. We got but one relatively quickly. But it’s just each jurisdiction has its own process, and so you can’t just assume that you do it the same way in any two places. So we’re after it. We are right now focused on -- I think the number is 27 specific countries. And hopefully, we’ll bring a few more of those to fruition in the next few months. Now what does that mean to monetization? There are, of course, several different ways to monetize. The simplistic way to think about it is a party does spectrum lease with Globalstar in the United States. That’s very straightforward, uncomplicated. They take the spectrum and deal with it as they choose. There are a lot of additional opportunities in several evolving subsets of the LTE market. There is a whole evolving area of private LTE. We’re working with some significant infrastructure partners to provide private LTE to operations that are not downtown operations but rather remote. These could be mines. They could be industrial sites, and those could be in the United States or elsewhere around the globe. We are certainly looking at a lot of different paths to monetize, including revenue shares, et cetera. We hope because the United States is ripe now that we’ll be able to do a spectrum lease in the United States with one party. Of course, if we do that, then the issues around the company’s capital structure evaporate, and that would be great. It gives us the flexibility, as we pursue the international markets, to handle them in the most profitable and most creative ways. Does that answer everything that you were searching for, Simon?
Yes, very helpful. I guess I’m just trying to square that with what you had said about the process you’d gone through, which suggested a lot of carriers and others had signed NDAs but, ultimately, that has not resulted in a transaction. So was there -- is there something that’s changed now that makes you feel like we still could have a transaction?
There is nothing in the near term that I would feel comfortable saying changes it. I’m really just pointing out that the simplest way to conceptualize it is a single lease, Simon, where someone could come in and do that. I’m not trying to imply that we have someone in toe. In fact, we don’t.
And then just maybe one last sort of housekeeping thing. You, obviously, had strong performance in the satellite business. You did talk about back orders, product availability and mass production issues. Can you just give -- size that for us? And what’s the path to resolving that? And what’s the opportunity?
The -- we’re not very good at giving guidance on a new product, Simon. It’s just very, very difficult for us. Yes, we had issues in getting the products out there late in terms of delivery. And when they got into the market, you always have the teething pains. It doesn’t matter how long you alpha and beta test, there’s always something that goes on when the customers get their hands on it. And we’re trying to solve all of those issues. But those are things that take place every time, and there are things that take place with a very discrete number of total units out in the field. But we are now in a position where we’re ramping to full production on these 2 newest products, SPOT X and SAT-Fi2. And I’m sure in the next few months, we’ll have a much, much better feel for the total market reception. Right now, we feel great about them. I mean, the first of the 3 products that we put out, which was the solar STX products has been just killer. We hope that rest of them are as well.
The next question in the queue comes from Jason Bernstein from Cantor. Your line is open. Go ahead sir.
Thanks for the background, Jay. Just do you think the lack of interest was driven more by price in term -- and I assume we’re talking about the 2.4 spectrum primarily. Can you maybe drill down on what your sort of opinion on, on the lack of engagement was from?
Sure, sure. First of all, not price. We did not have an offer that we could react to. There has been a reasonable amount of uneducated chatter in the market about the possibility that we were holding out for some price that was unattainable. That has not been the case. We have not had an offer that we could react to. Now why hasn’t it? Jason, the spectrum world is an odd duck, as you know, and strange things happen. Right now, people have been looking to the 3.5 CBRS spectrum with the view that, that was a panacea. They’ve been looking at that as a panacea for probably about five years now, and it hasn’t come out. It’s reminiscent of what happened so many years ago when everybody was so focused on TV white spaces. And so people are focused on that, and then they’re focused on 5G, and then they’re focused on this and that and the other thing. And the spectrum that we have is unique in its applicability, and it is terrific spectrum in a fully mobile band. It’ll be 3GPP-approved, so it’ll be in every device and available to any and all. It also pairs with either 3.5 or 5 gigahertz to create an LAA channel. And so it’s terrific spectrum. Who knows exactly why companies haven’t embraced it yet. But they can embrace it tomorrow, correct?
Yes. So part of that alludes to my next question. There’s a lot of positive sentiment around C-band, right? And the market seems to be heavily focused on C-band. And you guys have some of that in your portfolio. It’s not in the 3.7 to 4.2 range, but is there any focus or can you give us an update on sort of where the C-band opportunities sits?
We have C-band in two places where it would be applicable for services along the lines that you’re describing, and one of those is at 7 gigahertz. The nature of the work that’s happening at 3.7 to 4.2 will inform how we talk about our C-band spectrum. But we’ve had enough on our plate in terms of other efforts that it hasn’t been something that we have been able to prosecute on a daily basis, but we’re watching those processes, obviously. And we’re optimistic that our spectrum would fit nicely within some 5G infrastructure, but we’re not actively pursuing it at this time.
Okay. And just a few more questions. Last one on the spectrum front. The NOI -- or the request for an NOI and 5.1 that was filed a few months ago seemed to be a pretty expansive document, 150 pages or so. Is that some sort of long-term play to protect your license interest at 5 gigahertz so that it could be potentially used for terrestrial down the road?
What we were -- what we’re trying to do is to make certain that there’s not interference, which adversely affects the satellite system. And so that’s the purpose of that request. We certainly want to work with the interests that are in that band, which is our license to band. But it is in no way an attempt to do something different with the band than what is approved by the FCC, which is, it’s the UNII-1 band. And that’s all fine, and we’re happy with that. We just want to make sure that the rules of the FCC put in place some time ago, which included a path by which we would go back and talk to them if we started to experience interference, results in an open dialogue between us, the FCC, other people that are in that band, so we don’t damage the satellite system. But it is not, in any way, an attempt by us to use the band in a fashion differently than is approved by the FCC today. Let’s just use it in a way that don’t interfere with our satellite network.
Okay. Turning to sort of the merger or lack thereof now, was there any attempt prior to calling it off to engage with minority holders to see if there is a way to go forward or re-strike the deal?
Not to re-strike the deal. As you know, from following it, we were attacked immediately and attacked in sort of an information vacuum. And so we did offer in the way that we constructed the original press release and merger announcement to do a rights offering. And that rights offering certainly could have been structured creatively to have gotten to some of those issues for the -- for other minority shareholders. But though we offered it, no one chose to take it up with us and seriously conversed about the way that, that could be formulated in order to get to many of their concerns. So we were certainly open to it, but we were attacked immediately, and so it was kind of difficult to have those discussions, Jason.
And lastly, given the capital requirements, both on the amortization payments and what you need over the next, call it, year or two while you keep exploring a potential deal for spectrum and the sort of optics around the company right now, how do you see the capital plan going forward? Like is there an opportunity to refi the debt? And also, are there still components from the Thermo merger like putting the CTL shares in that you’d still consider if you need those potentially useful collateral, let’s say, in a financing?
There has been no discussion like that last point, Jason, at all. So we have to, as a board, determine what we want to do going forward. And as Rebecca said a moment ago, we have to evaluate all of the options, and we will do that. Part of the reason I wanted to say in the prepared remarks that we’ve raised $1.4 billion is that we have a demonstrated ability to raise funding, some of which comes from Thermo, some of which has come from the French banks, some of which has come from investors who are on this call. But it’s -- the sum that we’re talking about is not very large in the near term. I’m sure that we’ll do it and do it responsibly, but we really need to have a board meeting to discuss exactly that.
And on the board topic, last question, given sort of again the optics around litigious minority holders in the company, is there any message to send to the market by potentially getting some of these groups represented on the board to -- in a way to sort of go forward without this overhang of potential litigation?
A question that I haven’t considered, maybe will consider going forward, but it’s -- while people are suing you, it’s kind of difficult to put them on the board, so I guess it remains to be seen.
Our next question in the queue comes from [indiscernible]. Your line is now open.
A quick question on the EBITDA reconciliation. What is that $20.5 million revision to contract termination charge?
So this is Rebecca. I -- that originates in 2012. It was an accrual that we had made after an arbitration process that resulted in a judgment against us in the amount of €17.5 million. And some changes this quarter resulted in the likelihood of payment of that award being less than probable. And that was due to the statute of limitations for the counterparty to be able to confirm that award had expired.
Got it. And then one last one, on one of the past calls, it was mentioned that we should expect a few international approvals by the end of this year. Is that still the case? We had it in August. Should we be expecting a few approvals or it’s too early to say anything about that?
We are very hopeful that before the year is out there will be additional approvals. We can handicap which of the 27 countries I mentioned will be first, second, third or fourth, it’s just the nature of the beast. But yes, we anticipate additional approvals before year-end.
The next question in the queue comes from John Petrozzi with Muller Road Capital. Your line is open.
Jason, I thank you again for your side of the story. I did want to reiterate one thing that Jason just mentioned now, it has become somewhat contentious through this minority holders versus Thermo as the majority holder. And I would strongly encourage you and the board to consider expanding the board by at least 2 people that represents the minority holders, so that there is a level of comfort that takes place from a minority perspective as additional transactions and financing are considered. Just a statement. I guess, the other thing I would say is, while the strategic nature of the transaction was interesting and I think there were a number of people that agreed with it, a truly transparent process probably would have included a provision for a majority of the minority in the merger agreement, which would have maybe created a more open dialogue with the company as far as the thought around the valuations, et cetera, and then include some of the transparency as it related to those relations. I guess what I’d ask is, from a question perspective is, going forward, where there is a strategic transaction that you’re considering, will you include a majority of the minority as a way to not have a similar litigious outcome?
Definitely, the board will consider all of that, but we have no intention of entering into another strategic process that would involve Thermo. So it’s not currently relevant, but thank you.
And then just -- I’ll just follow up with one thing. You mentioned the C-band as well in some of the earlier comments. There is a material increase in the value of C-band as I’m sure you guys are well aware. I mean just look at the Intelsat stock going from $4 to $21, wherever, $22, $28 actually today. Why hasn’t that become a more important focus internally, even though you have your other things going with 2.4 and you have multiple investment banks engaged on your behalf in trying to figure out the correct strategic outcome there? Why isn’t there a more aggressive effort on the company’s part to get C-band into the forefront?
We’ve been busy.
We have no further questions at this time. I will now turn the call back over to Mr. Jay Monroe for any closing remarks. Sir?
Okay. Thank you, operator. And thanks, everybody, for being a part of the conversation today. We appreciate the questions. We appreciate the ideas, John, yours; and Jason, yours; and others. And we will be thinking about all of this. As I said, we’ve got board meetings coming up to deal with what happened inside the company now from a capital perspective as well as the strategic direction. And so all of the things that were raised today in the Q&A are helpful to our board thinking about those things, and I appreciate it.
And a last thanks to all of Globalstar’s employees who are probably listening right now who have been through a roller coaster ride that was not of their own making, so we appreciate everybody’s effort and focus on running a great satellite business. Thank you very much, thank you all.
Thank you. Ladies and gentlemen, this concludes today’s teleconference. Thank you for participating. You may now disconnect.
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