Elektrobit Oyj - Company Announcement

TERRESTAR CORPORATION, THE PARENT COMPANY OF EB (ELEKTROBIT CORPORATION)'S CUSTOMER TERRESTAR NETWORKS ALREADY IN A CHAPTER 11 CASE, HAS FILED FOR REORGANIZATION. EB HAS SIGNIFICANT RECEIVABLES FROM T

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Free for publication on February  17, 2011, at 11:00 a.m. (CET+1)

TERRESTAR CORPORATION, THE PARENT COMPANY OF EB (ELEKTROBIT CORPORATION)'S
CUSTOMER TERRESTAR NETWORKS ALREADY IN A CHAPTER 11 CASE, HAS FILED FOR
REORGANIZATION. EB HAS SIGNIFICANT RECEIVABLES FROM TERRESTAR.

EB (Elektrobit Corporation) has been informed that a customer of EB's subsidiary
Elektrobit  Inc., TerreStar Corporation (TerreStar), yesterday filed a voluntary
petition  for reorganization  under Chapter  11 of the  United States Bankruptcy
Code.  TerreStar is  the parent  company of  Elektrobit Inc's customer TerreStar
Networks  Inc  (TerreStar  Networks)  that  has  previously filed a petition for
corresponding  reorganization. Chapter  11 of the  United States Bankruptcy Code
establishes  a  process  for  reorganizing  financially  troubled  companies. On
February 15, 2011, EB's outstanding receivables from TerreStar Networks amounted
to  approximately USD  25.8 million (EUR  19.1 million as  per exchange  rate of
February 15, 2011).

EB  announced  on  November  20, 2010 that  it  had  initiated legal proceedings
against  TerreStar to  claim repayment  of its  receivables from  TerreStar. The
claim  is  partly  based  on  a  guarantee  issued by TerreStar of EB's accounts
receivables  from  TerreStar  Networks  and  partly  based on TerreStar's direct
contractual  obligations towards EB. The legal proceedings brought by EB against
TerreStar  in  order  to  collect  the  amounts  owed to EB have now been stayed
pursuant  to United States bankruptcy law. It  is EB's understanding that EB can
assert the claim in the reorganization case now commenced.

In  the  given  timeframe  it  has  not  been  possible  to  thoroughly  examine
TerreStar's court filings. Potential implications on collecting the amounts owed
to EB and on EB's profit, financial position and outlook will be announced later
when a reasoned analysis can be made.

Uncertainties  regarding  TerreStar  Networks'  filing  for  reorganization  and
collecting  the  receivables  from  TerreStar  Networks  and TerreStar have been
presented  under the  "Risks and  Uncertainties" section  of the  EB's Financial
statement  bulletin 2010 published  today, on  February 17, 2011. Information on
the  development  of  TerreStar  Networks'  filing  for  reorganization and EB's
initiated  legal proceedings against TerreStar are  presented in the October 20
and   25, November   20, and   December  30, 2010 stock  exchange  releases  at
www.elektrobit.com.
Oulu, 17.2.2011
EB, Elektrobit Corporation
Jukka Harju
Chief Executive Officer

Further information:

Jukka Harju
Chief Executive Officer
Tel +358 40 344 5466

For  further  information  on  TerreStar  and  TerreStar  Networks,  please  see
www.terrestar.com and www.TerreStarInfo.com.

Distribution:
NASDAQ OMX Helsinki
Principal media

EB, Elektrobit Corporation
EB creates advanced technology and turns it into enriching end-user experiences.
EB  is specialized  in demanding  embedded software  and hardware  solutions for
wireless and automotive industries. The net sales for the year 2010 totaled MEUR
161.8. Elektrobit      Corporation      is      listed     on     NASDAQ     OMX
Helsinki.www.elektrobit.com




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