The biggest impediment to getting Hedge Fund Manager Philip Falcone’s wireless company getting off the ground is money, but he may be seeing some traction on that front. LightSquared has reportedly obtained a four-year loan worth $750 million from UBS AG, and separately, SK Telecom (NYSE: SKM), which has wanted to enter the U.S. market for years, has confirmed it is in talks with the company.
The idea is to use satellites to roll out wireless broadband services to 260 million U.S. residents by 2015. The company would compete directly against Clearwire’s WiMax network, and 4G networks being built out by AT&T (NYSE: T) and Verizon Wireless. Harbinger’s Falcone, who got rich by out-smarting the subprime housing bubble, has already committed billions of dollars to the venture starting off when he bought SkyTerra for roughly $500 million. In July, the venture said it had obtained $1.75 billion in initial funding commitments.
Bloomberg reports that the loan from Zurich-based UBS is secured by assets and subsidiaries of LightSquared. Falcone needs $5 billion to build the network, according to an estimate from Oppenheimer & Co. analyst Tim Horan. Another injection could come from SK Telecom, the top carrier in South Korea. A spokeswoman for the company confirmed to Bloomberg that it was “in talks with Harbinger to decide investment terms.” SK Telecom had previously tried to enter the U.S. market when it invested in Helio.
Both UBS and LightSquared declined to comment about the additional financing.