Apple to invest up to $1.5 billion in Globalstar for satellite coverage expansion

(Reuters) - Apple will invest up to $1.5 billion in Globalstar to fund the expansion of its iPhone communication services, the satellite provider said in a regulatory filing on Friday.

Shares of Globalstar jumped over 30%, while Apple was down around 1.4% a day after it forecast tepid quarterly revenue growth.

Under the funding agreement, Apple will commit $1.1 billion in cash and also purchase 20% equity in Globalstar for $400 million. The satellite company said it will use a portion of the funds to pay down debt.

The move is another in a line of partnerships between space firms and mobile service providers looking to provide satellite-based connectivity to customers in regions with limited network access. 

Globalstar also said it will allocate 85% of its network capacity to Apple. The deal is expected to close on Tuesday. 

The iPhone maker partnered with Globalstar in 2022 for a feature that would allow Apple users to send emergency messages from remote areas. 

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shailesh Kuber)