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May 12, 1997updated 05 Sep 2016 12:49pm

NEWS CORP BALKS ON DEAL, ECHOSTAR TAKES LEGAL ACTION

By CBR Staff Writer

News Corp’s proposed $1bn investment for 50% of EchoStar Communications Corp (CI No 3,109) has hit another wall – this time that of the US District Court of Colorado. EchoStar has commenced a legal action against News Corp that seeks a $200m loan it says it was promised in the initial agreement. EchoStar maintains that the deal signed with News Corp guaranteed a $200m interest-free loan if the requisite regulatory filings were not in place by May 1. A spokesperson for EchoStar said that the papers are still not in order – delayed by News Corp as it reviewed the terms of the deal – and when the request was made for the loan, News Corp refused to provide it. Specific terms of the agreement and therefore, the reasons for News Corp’s inaction, remain confidential. Echostar believes it the two companies have a binding agreement and is confident that the court will rule in its favor. News Corp said in a release that it believes there is no merit to the claim and insists it will vigorously contest the matter. A surly spokesperson for the company would make no further comment.

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