The mutual settlement of the prior claims that Globalstar and Thales have against one another means that Thales will now complete its current work under Phase 2 of the companies’ contract and deliver the current group of six satellites under construction so that a fourth launch of six satellites can be conducted this year.
In addition, Globalstar and Thales have agreed to the principal terms relating to Globalstar’s purchase from Thales of six additional second-generation satellites at a fixed price of approximately € 25 million per satellite, payable over an approximately 3-year period after commencement of manufacturing.
The companies say that they expect to enter into a commercial contract based upon these terms in the near future.
Should this contract go ahead Globalstar will pay one-third of the arbitration award (€53 million) to Thales. Thales has agreed to waive the remaining two-thirds of the award in these circumstances.
Thales or Globalstar may terminate the settlement if the new commercial contract is not signed by February 28, 2013. Settlement is also subject to Globalstar’s receipt of consent from companies involved in its financing arrangements.
“This agreement both settles the previous disputes between Globalstar and Thales and establishes a clean slate for the programme once again such that the parties are now positioned to work as strategic partners for the long-term,” said Jay Monroe, chairman and CEO of Globalstar.
“We would like to thank Thales and the French bank group for their hard work over the past several weeks and look forward to working with them as we complete the fourth launch this year and further secure the health of the constellation for the long-term.”