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GeoEye sells preferred stock to Cerberus

US: GeoEye announced that it has completed the previously announced private placement of 80,000 shares of the company’s Series A Convertible Preferred Stock to Cerberus Satellite LLC, an affiliate of Cerberus Capital Management, L.P. (together with its affiliates, funds and managed accounts, “Cerberus”). Gross proceeds to the company from the private placement were USD 78 million, which will be used for the development and launch of GeoEye-2.

As announced last March, Cerberus agreed with the company to support its bid for the National Geospatial-Intelligence Agency’s (NGA) EnhancedView programme. Cerberus’ support included a commitment by Cerberus to purchase the company’s Series A Convertible Preferred Stock following a successful bid. This commitment was conditioned upon the final award to GeoEye of a satellite under the programme.

Under the terms of the contract, the NGA will contribute up to USD 336.9 million to the company toward the overall construction costs of the GeoEye-2 satellite. The company anticipates that GeoEye-2 will be operational in 2013. The EnhancedView award includes USD 2.8 billion for commercial satellite imagery purchases by the NGA over the next 10 years under the terms of a Service Level Agreement from GeoEye’s satellite constellation. The company was also awarded USD 700 million for value-added products and services and includes the design and procurement of additional infrastructure to support government operations. This also includes EyeQ Web Mapping Services to be delivered under the Service Level Agreement.

Source: GeoEye