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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 29, 1998
LORAL SPACE & COMMUNICATIONS LTD
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(Exact name of registrant as specified in its charter)
Islands of Bermuda 1-14180 13-3867424
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
600 Third Avenue, New York, New York 10016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 697-1105
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Item 5. Other Events.
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On June 29, 1998, Loral Space & Communications Ltd. ("Loral")
completed the public offering (the "Offering") of 23 million shares of its
common stock (including 3 million shares issued upon exercise of the
underwriters' over-allotment option) at $27.00 per share. The net proceeds of
the Offering were $602 million, of which Loral used $175 million to fund the
Globalstar Purchase (as described below) and the remainder of which Loral
intends to use for general corporate purposes, including investment in its
existing core businesses, to pursue emerging satellite service opportunities
worldwide and for possible acquisitions.
On July 6, 1998, Loral completed the purchase of 30% of the
limited partnership interests of Globalstar, L.P. ("Globalstar") (i.e. 4.2
million partnership interests in the aggregate corresponding to 16.8 million
shares of common stock of Globalstar Telecommunications Limited ("GTL")) held by
the founding strategic partners of Globalstar for $420 million in cash (the
"Globalstar Purchase"), or the equivalent of $25 per share of GTL common stock.
The strategic partners participating in the transaction are reinvesting one half
of the proceeds ($210 million in the aggregate) in the Globalstar System for the
purchase of Globalstar gateways and user terminals. Loral used $175 million of
Offering proceeds to finance the Globalstar Purchase and the remaining balance
of $245 million was provided through the concurrent sale by Loral of 8.4 million
shares of GTL common stock (the "Soros Investment") that Loral owned to persons
or entities advised by or associated with Soros Fund Management L.L.C.
("Soros").
After giving effect to the Globalstar Purchase, Loral's fully
diluted ownership in Globalstar increased from approximately 38% to 42%, after
giving effect to the Soros Investment. Soros acquired from Loral, in lieu of
Globalstar limited partnership interests, shares of GTL common stock, which are
restricted for U.S. securities law purposes, and for which GTL has agreed to
file a shelf registration statement and have such registration statement
declared effective within one year. Accordingly, Soros paid to Loral a premium
of $4.1667 per share of GTL common stock over the price paid by Loral in the
Globalstar Purchase.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LORAL SPACE & COMMUNICATIONS LTD.
(Registrant)
Date: July 6, 1998 By: /s/ Eric J. Zahler
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Eric J. Zahler
Vice President, General
Counsel and Secretary
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