New news about Iridium:
Baltimore firm makes bid for Iridium Colussy in last-ditch bid for Iridium $25 million offer may save 72 communications satellites
Source: THE WASHINGTON TIMES
Publication date: 2000-10-28
Arrival time: 2000-10-30
A director of Baltimore energy company Constellation Energy Group is heading a last-ditch attempt to buy Iridium LLC, the District- based satellite telephone company that went bankrupt last year.
Constellation Director Daniel A. Colussy and a group of investors have offered $25 million for Iridium's assets.
The move could dissuade Motorola Corp. from destroying the 72 low- orbit satellites, worth an estimated $5 billion.
"If we can't find an acceptable buyer, we will go ahead and de- orbit," Motorola spokeswoman Jennifer Weyrauch said.
But she declined to say whether the new offer from Iridium Satellite LLC, which lists Mr. Colussy as its chairman, is the last one Motorola will entertain.
Motorola has endorsed the deal with Iridium Satellite LLC.
"We are pleased Iridium Satellite" has made an offer to buy the assets, Ms. Weyrauch said.
Motorola has had court approval since March to destroy the satellites, which continue to orbit Earth. The company drafted a plan to de-orbit them, and federal agencies have completed their review of the document.
Motorola has said it would cost $37 million to de-orbit the satellites. The company also said it costs $10.1 million a month to keep the satellites in orbit, so it threatened to destroy them in July.
Plans to destroy the satellites were put on hold while Mr. Colussy negotiated with Motorola, which controls the satellites because of its 19-percent majority stake in Iridium. Mr. Colussy has negotiated with Motorola since late July, according to documents filed with U.S. Bankruptcy Court in Manhattan, N.Y., late Thursday.
"We made this decision in the best interests of our company and our shareholders," Ms. Weyrauch said.
Iridium said in a motion requesting approval of the sale terms that Mr. Colussy and his co-investors have the money to operate the satellites.
The new bid represents another decline in Iridium's asking price.
Craig McCaw's Eagle River Investments LLC offered $600 million for Iridium in February before revoking the offer a month later. New York- based investment bank Castle Harlan announced June 1 its tentative decision to pay $50 million for Iridium's assets. Castle Harlan had until July 21 to finalize an agreement to take over Iridium, and it decided it couldn't make money with the Iridium satellites.
Mr. Colussy did not indicate in his bid how the new Iridium Satellite LLC plans to make money if the court awards it Iridium's assets. He was unavailable for comment yesterday, and his attorney did not return calls seeking comment.
Iridium Satellite LLC is agreeing to pay $25 million for Iridium's assets, according to court records. The bid includes $6.5 million in cash and $18.5 million in deferred payments.
Records also indicate the bidders paid Motorola a $200,000 deposit on Oct. 18.
Others still can submit competing bids, and a hearing has been scheduled for Nov. 8 to seek court approval of the Iridium Satellite LLC bid. The companies hope to close the deal by Nov. 30.
A motion seeking approval of a sale to Mr. Colussy's group says Boeing Co. would operate the system for the prospective buyers. Rick Stephens, spokesman for Boeing Space and Communications Services, said Boeing is not making an equity investment in the satellites along with Iridium Satellite LLC.
Boeing still must get Federal Communications Commission approval to transfer licenses to operate the satellites from Motorola. That should take no more than a few months, Ms. Weyrauch said.
Iridium went out of business last year when it couldn't muster enough subscribers for its satellite phone service. Iridium filed for Chapter 11 bankruptcy protection in August 1999 because it was unable to make payments on an estimated $4.4 billion in debts.
The satellites support both calling and paging services. Iridium has attracted just 55,000 customers since the service started in November 1998.
(Copyright 2000)
Publication date: 2000-10-28
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