Iridium Receives Extension From Lenders [until 8/11]
Business Wire - June 30, 1999 10:59
WASHINGTON, D.C.--(BUSINESS WIRE)--June 30, 1999--Nine days after announcing a
revamped marketing strategy, Iridium LLC announced today that it has received a waiver through
August 11 of the financial covenants relating to customers and revenues under its $800 million Senior
Secured Credit Facility.
"This waiver comes at a critical time for Iridium," said John Richardson, CEO of Iridium LLC. "With
our lower and simplified prices taking effect in July, we now have the time to implement our refocused
marketing strategy."
Iridium's new strategy, announced June 21, includes airtime price reductions of up to 65%, a flat
per-minute rate for international calls, and a greater emphasis on creating a value proposition for
industrial customers who have a defined need for satellite communications. In addition, the company's
two product manufacturers, Motorola and Kyocera, have announced significant reductions in the
wholesale prices of their satellite phones and other subscriber equipment.
Iridium is in the process of negotiating with Motorola, other strategic investors, representatives of its
high yield bondholders and its bank creditors to develop a mutually acceptable plan to restructure the
capitalization of the company. "Although this restructuring process is complex and involves diverse
interests, we believe that all of the parties want to see Iridium succeed," said Richardson.
Interest is due on the company's high yield bonds on July 15, subject to an automatic 30-day grace
period. The extension of the waiver of the covenants under Iridium's Secured Credit Facility will run
through August 11, 1999, but would terminate earlier if Iridium were to make payments to holders of
its high yield bonds. Iridium intends to use the next six weeks to work with representatives of all of its
creditors to reach an agreement in principle on ILLC's financial restructuring.
Iridium LLC became the world's first global satellite phone and paging company on November 1,
1998. Its network of 66-low earth orbiting satellites, combined with existing terrestrial cellular systems,
enables customers to communicate around the globe. Iridium World Communications, Ltd.
(NASDAQ: IRID) is the public investment vehicle of Iridium LLC.
Iridium is a registered trademark and service mark of Iridium IP LLC.
CONTACT: Iridium LLC
Michelle Lyle, 202/408-3818
or
Iridium News Bureau
202/712-7741
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