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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
October 6, 1997
Date of Report (Date of earliest event reported)
AMERICAN MOBILE SATELLITE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23044 93-0976127
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10802 Parkridge Boulevard, Reston, Virginia 20191-5416
(Address of principal executive offices) (Zip Code)
(703) 758-6000
(Registrant's telephone number, including area code)
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Item 5. Other Events
As previously reported, American Mobile Radio Corporation ("AMRC"), a subsidiary
of AMSC, was one of two winning bidders for a Federal Communications Commission
("FCC") license to provide satellite-based Digital Audio Radio Service ("DARS")
throughout the United States. Also, as previously reported, AMSC entered into an
agreement with WorldSpace, Inc. ("WorldSpace"), by which WorldSpace acquired a
20% participation in AMRC. In addition, as previously reported, in connection
with the DARS auction, AMRC arranged for financing of the FCC license fees as
well as for initial working capital needs which included the issuance of options
which, if exercised, would have a dilutive impact on AMSC's ownership interest
in AMRC.
On October 6, 1997, the FCC announced that it was prepared to grant a DARS
license to AMRC, following the payment by AMRC of the remainder of the DARS
license fee. A 20% down payment was made by AMRC following the license auction
in April, and the remainder of the $89.9 million license fee is to be paid by
October 16, 1997. Under the terms of AMRC's financing and contingent on FCC
approval, exercise of the outstanding issued options could result in the
dilution of AMSC's ownership interest in AMRC to 28%.
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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.
AMERICAN MOBILE SATELLITE CORPORATION
(Registrant)
Date: October 7, 1997 /s/ Randy S. Segal
Vice President, General Counsel and Secretary
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EXHIBIT INDEX
Exhibit
Number Exhibit
99.13 -- American Mobile Satellite Corporation Press Release No. 97-#16 dated
October 7, 1997 (filed herewith).
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Reference: 97-#16
FOR IMMEDIATE RELEASE
FCC TO GRANT DARS LICENSE TO AMERICAN MOBILE RADIO
Digital Audio Radio Technology Makes Possible Nationwide Radio Programming with
CD-Quality Sound
Reston, VA, October 7, 1997--The Federal Communications Commission (FCC)
yesterday announced that upon receipt of payment within ten days, a license to
supply satellite-based Digital Audio Radio Service (DARS) throughout the United
States will be granted to American Mobile Radio Corporation. The new technology,
expected to be available to the public within the next few years, will bring
nationwide radio programming, with the sound quality of compact disk, directly
to car radios. American Mobile Radio, a subsidiary of American Mobile Satellite
Corporation, is one of only two companies to be granted DARS licenses by the
FCC. The two licenses were allocated by auction in early April of this year. A
20% down payment was made following the auction, and the remainder of the $89.9
million license fee is to be paid within ten days.
"The FCC license award represents another milestone in American Mobile Radio's
development of its DARS business," said American Mobile Radio President Lon C.
Levin. "Our technology development and business planning are well underway, and
we look forward to announcing satellite manufacture and launch contracts by year
end." American Mobile Satellite President and CEO Gary M. Parsons repeated his
earlier statement that American Mobile Radio will be managed and financed
separately from the financial structure of American Mobile Satellite. "We
currently have the funding in place to cover the remaining FCC license
payments," Parsons said, speaking on behalf of the subsidiary. "In addition to
our current arrangement with WorldSpace, we expect to explore additional
partners and sources of funding to accommodate the accelerating development of
the DARS system." WorldSpace, Inc. is a Washington, DC-based company whose
proven DARS technology, which is currently being deployed internationally, is
the underlying technical basis for American Mobile Radio's DARS offering.
WorldSpace holds a 20% equity stake in American Mobile Radio as well as options
to increase its ownership in the future.
American Mobile Radio is a subsidiary of American Mobile Satellite
Corporation, which offers a full range of mobile communications including
telephone, digital broadcast dispatch, data, fax and position reporting
services. American Mobile Satellite's shareholders include Hughes
Communications, Inc., Singapore Telecom, and AT&T Wireless Services.
Press Contact: Orly Konig Lopez Investor Contact: Renate Brown Neely
703-716-6522 703-716-6558
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Factors that could cause forward-looking statements in this news release to
differ materially from actual results are discussed in the company's S-1
registration statement; Form 10K for the year ended December 31, 1996; For 10Q
for the period ended June 30, 1997; and other periodic filings with the
Securities and Exchange Commission. Copies of the filings are available upon
request from the company's investor relations department.
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