Globalstar confirmed May 17 that the arbitrators ruled that Thales has no further obligation to manufacture or deliver satellites under the third phase of a contract that provided an option for Globalstar to purchase up to 23 second-generation satellites in addition to the 25 satellites it purchased in the first two phases under the contract. The arbitrator also ordered Globalstar to pay Thales approximately 53 million euros ($67.2 million) in termination charges by June 9, 2012.

   Globalstar Chairman and CEO Jay Monroe said that the ruling allows both companies to agree to other terms and that he has already initiated post-ruling discussions with Thales to seek mutually agreeable solutions that neither include financial penalties for Globalstar nor threaten its ongoing work with Thales.

   “Although we had hoped for a different outcome, we have been in constant contact with Thales over the last several months as completion of phase 2 satellites continues, and over the past days to negotiate acceptable terms for ordering additional satellites,” Monroe said in a statement.

   Globalstar’s arbitration was first announced during the company’s 2011 second-quarter fiscal report, in which Monroe confirmed that the financing for its additional 24 constellation satellites had not been secured and that it had begun arbitration proceedings to force prime contractor Thales Alenia Space to begin building them. The project was financed via French export-credit agency Coface in a loan deal announced in March 2009 that required Globalstar to have a permanent U.S. license to operate its second-generation satellites in North America.

   Globalstar amended its Coface export credit facility agreement in March to significantly extend the initial principal repayment date beyond 2012. Globalstar’s first repayment date will now be as late as June 2013 instead of June 2012. The precise date is dependent on the date of Globalstar’s fourth launch of second-generation satellites.

   “Having already paid over 450 million euros ($570.6 million) to Thales and having experienced satellite delivery delays approaching two years, we remain hopeful that a mutually acceptable agreement can be reached. Globalstar has been operating under extremely challenging circumstances for the past few years as a result of delayed satellite deliveries and remains amenable to negotiating a positive resolution with Thales.”