Apple Inc. has selected Globalstar Inc. as its partner for a feature that would allow iPhone 14 users to send emergency messages from remote locations, sparking a 20% surge in the satellite services firm's shares.
Apple will pay for 95% of the approved capital expenditure for the new satellites that would be needed to support the service, but Globalstar said on Wednesday it will still need to raise additional debt to construct and deploy the satellites.
Globalstar, which makes low-earth orbit (LEO) satellites, said investment bank Goldman Sachs & Co is currently helping explore capital markets opportunities and it expects to complete a financing in the fourth quarter of 2022.
LEO satellites operate 36 times closer to the earth than traditional ones so they take less time to send and receive information, leading to better and faster broadband service even in remote areas.
Globalstar's shares, which fell about 16% earlier on Wednesday, was trading at $2.59.
Earlier this year, the company announced a deal to construct 17 new spacecraft with small-satellite launch firm Rocket Lab USA for satellites it plans to launch in 2025.
Globalstar successfully launched a spare satellite from Cape Canaveral's Kennedy Space Center in June, using Elon Musk-owned SpaceX's Falcon 9 rocket.
Last month, wireless carrier T-Mobile US Inc said it will use SpaceX's Starlink satellites to provide mobile users with network access in parts of the United States, outlining plans to connect users' mobile phones directly to satellites in orbit.
The latest iPhones starting at $799, will be available later this month, Apple said at its fall event, titled "Far Out."
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