Fortress In Talk With Banks To Buy LightSquared Out Of Bankruptcy: Reports

(RTTNews) - According to reports, private-equity firm Fortress Investment Group (FIG), an investor in wireless-telecommunications LightSquared Inc. is in talks with banks for financing to acquire the latter out of bankruptcy. Fortress Investment had already once planned to make an offer for the wireless venture founded by financier Philip Falcone.

Persons familiar with the matter said that Fortress is in discussions with J.P. Morgan Chase & Co. (JPM), and Credit Suisse Group AG (CS) , to raise nearly $2 billion in order to support the deal. Fortress remained unclear about the cash contribution that is involved to make the deal. The talks come after private equity firm Centerbridge Partners LP backed out of its tentative bankruptcy-reorganization plan, under which it would pay $3.3 billion for LightSquared, and assume about $1.7 billion in liabilities. Centerbridge in this move was supported by Fortress Investment, J.P. Morgan and Harbinger Capital.

Fortress would take Centerbridge's place as the investor putting up fresh money to buy LightSquared, the people said. The company intended to keep the Centerbridge deal as it sorted through next steps after the latter walked away from the transaction, after concerns about regulatory clearance arose. Dish Network Corp. (DISH), which wanted to enter the wireless industry as part of its diversification, had also earlier this year offered $2.2 billion for LightSquared, which was later canceled.

According to the people concerned, the discussions are not confirmed, and might drift apart. LightSquared filed for bankruptcy protection in May 2012 after regulators blocked its plan to proceed with the network, saying its spectrum interfered with global positioning systems. LightSquared's main asset is spectrum or airwaves needed for telecommunications firms to operate wireless network. It is believed that owning spectrum will be valuable as demand shoots up for high-speed cellphone and mobile Internet service.

All the parties relating to the matter declined to comment.