Not a floorless but some interesting financing--
Tuesday April 3, 7:01 am Eastern Time
Press Release
SOURCE: Motient Corporation
Rare Medium to Provide up to $50 Million to Motient
Companies Announce Exploration of Strategic Alternatives
RESTON, Va., and NEW YORK, April 3 /PRNewswire/ -- Rare Medium Group, Inc. (Nasdaq: RRRR - news) and Motient Corporation (Nasdaq: MTNT - news) today announced that they have signed a definitive agreement whereby Rare Medium agreed to provide Motient up to $50 million on a short-term basis by purchasing exchangeable notes of Motient.
According to Glenn S. Meyers, Rare Medium chairman and CEO, ``We are excited about this transaction with Motient and believe that our actions today may facilitate a broader alliance between the two companies. We have had constructive discussions with Motient regarding strategic alternatives and hope to complete those in the near term.''
Motient President and CEO Walter V. Purnell, Jr. said, ``We have complete confidence in our business strategy and are pleased that Rare Medium has entered into this transaction assisting us in meeting our near-term liquidity requirements. We also believe that a broader alliance between our two companies makes sense and look forward to continuing to explore strategic alternatives with Rare Medium. Our experience in selling business-to-business wireless solutions led us to conclude that we needed to integrate our offering more completely with existing IT infrastructures. With Rare Medium, we will explore broad offerings for Fortune 1000 CIO's that encompass the best practice for e-Commerce and mobility.''
Added Meyers, ``More and more of our customers are demanding mobile e-Business strategies and applications. Developing our relationship with Motient would enable us to expand our e-Business service offering in wireless data and mobile Internet services to our existing clients and beyond. Moreover, in light of this transaction and overall conditions in our sector, we have continued to 'right-size' our business, including a recent reduction of our services workforce by approximately 20 percent, to reduce costs and preserve capital.''
At the initial closing, Rare Medium purchased $25 million of exchangeable notes of Motient. An additional $25 million may be advanced at Motient's request subject to certain terms and conditions, including the mutual agreement of the parties and certain additional approvals of Motient's financing guarantors. The notes will bear interest of 12-1/2 percent per annum and will be secured by a pledge of shares of stock of XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - news) held by Motient. The notes are pre-payable at any time in cash, or at Motient's election, in shares of XM stock valued at 95 percent at XM's market price at the time of the exchange. The notes are exchangeable at Rare Medium's option for shares of XM stock at $10.41 per share with respect to the initial advance. A portion of the proceeds of the Notes will be applied to required bank facility repayment and subject to financing guarantor approval for availability to Motient.
Although the companies have been discussing strategic alternatives, such discussions are at an early stage and there can be no assurance that any transaction will occur.
About Rare Medium
Rare Medium provides end-to-end Internet professional services including strategic, creative and technological consulting for e-Business initiatives, e-Commerce, on-line brand development and management; services related to Wireless and Broadband applications and the launch of on-line commerce trading exchanges. Rare Medium also makes strategic investments in independently managed companies that it believes possess superior e-Business focused or technology driven business models.
Risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements in this news release are described in Rare Medium's annual report on Form 10-K for the year ended December 31, 2000 and its other periodic filings and reports with the Securities and Exchange Commission. Those risks include, among other things, Rare Medium's ability to attract and retain highly skilled employees, the success of Rare Medium's cost-reduction efforts, Rare Medium's ability to complete a strategic transaction on favorable terms, and risks related to Rare Medium's investments in debt and equity securities.
About Motient Corporation
Motient ( www.motient.com ) owns and operates an integrated terrestrial/satellite network and provides a wide range of two-way mobile and Internet communications services principally to business-to-business customers and enterprises. The company provides eLink and BlackBerry(TM) by Motient two-way wireless email service to customers accessing email through corporate servers, Internet Service Provider (ISP) and Mail Service Provider (MSP) accounts, and paging network suppliers. Motient serves a variety of markets including mobile professionals, telemetry, transportation, field service, and nationwide voice dispatch offering coverage to all 50 states, Puerto Rico, the U.S. Virgin Islands, and hundreds of miles of U. S. coastal waters.
ELink is a service mark and Motient is a trademark of Motient Corporation. The RIM and BlackBerry families of related marks, images and symbols are the exclusive properties of, and trademarks of Research In Motion Limited -- used by permission.
Factors that could cause actual results to differ materially from those in the forward-looking statements in this news release are described in Motient Corporation's registration statement on Form S-3 (File No. 333-42104) and in Motient's annual report on Form 10-K for the year ended December 31, 2000 and its other periodic filings and reports with the Securities and Exchange Commission. Copies of such reports and filings are available upon request from Motient Corporation's Investor Relations.
About XM
On March 18, XM successfully launched its first satellite ``Rock'' and is scheduled to launch its second satellite ``Roll'' in early May. XM will transform radio, an industry that has seen little technological change since FM, almost 40 years ago. XM will offer up to 100 channels of digital-quality sound and provide coast-to-coast coverage of music, news, sports, talk, comedy and children's programming. XM won several awards at the International Consumer Electronics Show in January, including ``Best of CES'' in the automotive category. XM's strategic investors include America's leading car, radio and satellite TV companies -- General Motors, American Honda Motor Co. Inc., Clear Channel Communications, DIRECTV and Motient Corporation, the company's largest shareholder.
SOURCE: Motient Corporation
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