WASHINGTON — Jay Monroe, CEO of low-Earth-orbit-satellite operator Globalstar for the past 13 years, is leaving his position, but not the company, following a failed merger with another company he controls.
Globalstar announced Sept. 4 that Dave Kagan, the operator’s president, has replaced Monroe and will lead its satellite services business, which provides voice and data connectivity to satellite phones, trackers and other devices.
Monroe will serve as executive chairman of Globalstar’s board of directors, guiding the company’s efforts to monetize the terrestrial use of its satellite spectrum for broadband connectivity.
Satellite services have not earned enough revenue for Globalstar to pay down its $542.3 million debt, much of which is owed to Thales Alenia Space for building Globalstar’s second-generation constellation of 24 spacecraft.
A Monroe-led effort to combine Globalstar with the landline company FiberLight, both owned by Monroe’s Thermo Capital, disintegrated Aug. 1 after a legal battle erupted with Mudrick Capital Management, Globalstar’s largest independent shareholder.
Mudrick called the merger “unfair” to minority shareholders of Globalstar, saying it would dilute their stake while giving more financial resources to Monroe.
Monroe, during an Aug. 2 earnings call, listed “the sizeable cost of litigation” as one of the reasons for terminating the merger. The legal dispute, along with stock volatility and uncertainty on when the merger could close, all amounted to “a prolonged distraction for the management team, which could have a materially damaging impact on the company’s finances and operations,” he said.
Kagan is well suited to handle Globalstar’s satellite services, Monroe said, having overseen recent improvements in the company’s financial performance. In a statement, Monroe said Kagan oversaw a 50 percent increase in adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, in 2017, and a 37 percent increase year to date in 2018.
As executive chairman, Monroe will continue efforts to monetize 16.5 MHz of S-band spectrum on a global basis.
Globalstar is providing Kagan with a $450,000 annual salary and a restricted stock award grant of 2 million shares.
Kagan was named president of Globalstar in 2016 but left in March 2017 for what turned out to be a brief stint at satellite network operator Speedcast. He returned to Globalstar in November.
Kagan has worked in the satellite industry for more than 20 years, having held previous jobs at VSAT operator ITC Global and maritime network operators MTN and Globe Wireless.