Dish Network offers $1.38 billion for Terrestar

NEW YORK (Reuters) - Terrestar Networks Inc <TSTRT.UL> said it has received a $1.375 billion cash bid from billionaire Charlie Ergen's Dish Network Corp <DISH.O> to buy the telecommunications company's assets through a bankruptcy auction, court papers show.

Ergen, who also controls EchoStar Corp <SATS.O>, has been competing against other potential bidders, including a group of senior noteholders and wireless communications company MetroPCS Communications Inc <PCS.N>, people familiar with the process have said.

According to a filing in Manhattan bankruptcy court, Dish will allow Terrestar to extend a deadline to obtain bids for its assets until June 27, with a court-supervised auction to take place on June 30. Any sale requires court approval.

Terrestar has operated under Chapter 11 bankruptcy protection since October. Its most sought-after assets include wireless airwaves used by wireless service providers.

In the filing, Terrestar also said EchoStar, its so-called debtor-in-possession lender, would raise to $90 million from $75 million the amount of financing it has available to run its business during the bankruptcy, provided Dish's bid were successful.

(Reporting by Nick Brown, Megan Davies, Matt Goldstein, Caroline Humer and Jonathan Stempel in New York; Editing by Maureen Bavdek)