EchoStar Makes Delayed Interest Payments, Citing Hopes for FCC Talks
EchoStar is making previously delayed interest payments to holders of company notes. In an SEC filing Friday, EchoStar said it notified the trustees of secured notes that it would make scheduled interest payments, originally due May 30 and June 2, including interest on the defaulted payments. Earlier, EchoStar cited uncertainty around its spectrum licenses due to FCC issues as its reason for not making the scheduled payments (see 2505300001).
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The company told the SEC on Friday that not making the payments gave it time to "assess its alternatives" and that Chairman Charlie Ergen met with FCC Chairman Brendan Carr earlier this month to make the case that any agency reconsideration of deadlines for EchoStar's 5G network buildout or of the 2 GHz band's sharing rules "would threaten the viability of EchoStar’s current operations and future plans." EchoStar said that at a subsequent meeting with President Donald Trump, the president "encouraged the parties involved to reach an amicable resolution."
No resolution has been reached, and one might not be, but EchoStar decided in good faith to cure the nonpayment defaults "based on the current discussions," it said. Making the payments "will further extend the timeline for EchoStar to explore an acceptable resolution of the FCC’s stated concerns in a manner that minimizes disruption to the Company’s businesses and lifts the regulatory uncertainty created by the inquiries."
However, since a good resolution of FCC issues isn't assured, EchoStar subsidiary Dish won't make $114.4 million in interest payments due Tuesday, it said.