Dish Network offers $1 billion to buy a bankrupt satellite/antenna company for reasons only it knows
Dish Network has agreed to buy DBSD, a company currently in Chapter 11 bankruptcy protection that's reportedly working on a system to tie together satellite and ground-based antenna communication for wireless phone and internet service, pending approval by the FCC. Dish pegs the purchase price at approximately $1,000,000,000 (subject to certain adjustments) including the interest on DBSD's debts. Exactly what its plans for the company are remain a mystery, as The Hollywood Reporter quotes mystified analysts like Craig Moffett suggesting theories including wireless internet service, mobile TV, or an integrated satellite/phone/TV bundle to compete with cable operators. SpaceNews.com has the most extensive breakdown, from Dish's initial $45 million investment back in 2009, to the recent FCC decision on a similar hybrid service from LightSquared that may have caused DBSD's spectrum & technology to suddenly become much more valuable. Whatever it is, they considered it worth writing an awful large check for, although we can't help but wonder if they couldn't have broken some of that money off to deal with this whole TiVo issue.
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DISH Network to Purchase DBSD, Developer of U.S. Hybrid Communications System
ENGLEWOOD, Colo., Feb. 1, 2011 /PRNewswire/ -- DISH Network Corporation (Nasdaq: DISH) announced today that it has entered into an agreement to acquire 100 percent of the equity of the reorganized DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion subject to certain adjustments, including interest accruing on DBSD North America's existing debt.
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DISH Network is also committing to provide a debtor-in-possession credit facility to DBSD North America in connection with filings under Chapter 11 of the U.S. Bankruptcy Code. The credit facility, which remains subject to approval by the Bankruptcy Court, will consist of a non-revolving, multiple draw term loan in the aggregate principal amount of $87.5 million.
This transaction is to be completed upon satisfaction of certain conditions, including approval by the Federal Communications Commission and DBSD North America's emergence from bankruptcy.
Detailed information is available in DISH Network's Form 8-K filed today with the Securities and Exchange Commission.
About DISH Network
DISH Network Corporation (NASDAQ: DISH), through its subsidiary DISH Network L.L.C., provides more than 14.2 million satellite TV customers, as of September 30, 2010, with the highest quality programming and technology at the best value, including HD Free for Life. Subscribers enjoy industry-leading customer satisfaction, the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 200 company. Visit www.dish.com.
SOURCE DISH Network Corporation
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