EchoStar secures funding
to cover GM bridge loan
LONDON - EchoStar has received a commitment from Credit Suisse First Boston for $2.75bn (£1.9bn) financing for its takeover of Hughes Electronics.
The money will pay off a bridge loan EchoStar secured with Hughes-owner General Motors as part of its $26bn (£17.9bn) takeover of its larger rival, the Hughes-owned DirecTV.
It will be added to the $2.75bn funding EchoStar has already received from Deutsche Bank, bringing the total amount of cash involved in the deal to $5.5bn (£3.9bn).
GM agreed to the loan after it rejected the terms of financing from UBS Warburg. The investment bank is understood to have inserted a clause into the terms that would have allowed it to walk away from the funding at any time.
However, EchoStar's takeover of DirecTV is by no means a done deal. The merger is expected to be subject to a 12-month investigation into whether the creation of a satellite monopoly in the US is anti-competitive.
If the deal is given regulatory clearance, the resulting company will be one of the biggest pay-TV companies in the world with 16.7m subscribers.
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