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Launch doubt for Globalstar after default notice

Globalstar's attempts to continue with the roll out of its second generation constellation has suffered the latest in a series of setbacks, after launch provider Arianespace served notice of a default on payments.

In an August 9 filing to the US Securities and Exchange Commission, Globalstar admitted that this notice had been received, and that it may affect the next planned launch in its schedule, the fourth in the programme, which was expected later this year.

The company's statement said:

“In August 2012, (Globalstar) received notification of payment default from Arianespace. Based on the terms and conditions of the amended and restated contract, Arianespace is entitled to suspend any and all of its activities in preparation of the fourth launch if (Globalstar) does not make payment in full within 15 days.”

“If payment is not made within 60 days, Arianespace is entitled to terminate the contract, which would be an event of default under the Facility Agreement.”

The Facility Agreement in this case refers to Globalstar's funding arrangements, which could be threatened by a failure to launch the new satellites.

Globalstar says that it is working with Arianespace to reach “a mutually beneficial resolution.”

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