Solus-Backed TerreStar Weighs Options for Spectrum Holdings

TerreStar Corp. has hired a financial adviser to explore strategic alternatives for the 5G airwaves within its medical division, according to people familiar with the matter.

The company, majority-owned by Solus Alternative Asset Management, is weighing options to monetize the spectrum, either by refinancing debt or going public through a merger with a special purpose acquisition company, the people said. It could also seek investment from a private equity firm or a large telecommunications company, they added.

TerreStar got permission from the U.S. Federal Communications Commission last year to use its wireless airwaves in medical facilities, and potentially to deploy that spectrum in other industries if it meets certain conditions. This increased the value of the licenses, which could now fetch more than $1 billion, said the people, asking not to be identified because the matter is private.

Discussions are at an early stage and may not result in a deal. A representative for Solus declined to comment. A spokesperson for TerreStar didn’t respond to requests for comment.

Spending Billions

Mobile carriers such as Verizon Communications Inc. and AT&T Inc. are spending billions of dollars on spectrum assets as they build out their 5G networks for customers. The FCC has already set what will be the third auction in little over a year for so-called midband airwaves. The last auction, concluded in February, drew a record $81 billion in bids.

The midband frequencies, including those licensed by TerreStar, are prized for their combined ability to travel far and carry lots of data. They are expected to drive years of growth when deployed for next-generation mobile devices, autonomous vehicles, health-care equipment and manufacturing facilities.

TerreStar’s spectrum licenses are expected to be used in health-care facilities across the country through its medical unit, according to its website.

TerreStar was founded in 2013, born from a restructuring of the original company, which was a mobile satellite network operator. One of its units, TerreStar Networks Inc., was sold to Dish Network Corp. for $1.38 billion.

The Chapter 11 restructuring eventually handed ownership of TerreStar to investors including Solus and Highland Capital Management.

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