Iridium Venture Gets Another Bid
Friday August 25 5:24 PM ET
By BRUCE MEYERSON, AP Business Writer
NEW YORK (AP) - The bankrupt Iridium venture has received another bid to save the wireless phone company's $5 billion satellite system from being pulled from space and destroyed.
A California-based organization named CMC International is offering to pay $30 million to acquire Iridium's 88 satellites and other assets, according to a court filing submitted Friday.
It wasn't immediately clear whether the bid was being seriously considered by either Iridium or Motorola, which is both the lead investor in the Iridium consortium and the operator of the satellite network.
Iridium didn't return phone calls seeking comment, while Motorola declined to comment on the court filing and lawyers for CMC declined to offer any additional information about the company or its bid.
According to the court filing, the CMC bid was ``revised in response to developments in these proceedings and (Iridium's) request.'' But a spokesman for Motorola said Friday that his company has not been holding talks with any parties and is still completing plans to destroy the satellites by steering them into the Earth's atmosphere. The next court hearing in the case was scheduled for Monday.
Anyone can submit a bid to the New York bankruptcy court handling the Iridium case, and as the situation turned more dire in recent weeks, there have been ``official'' bids for as little as $5 million and even nothing but a pledge to repay debtors over 20 years.
Likewise, dozens of parties have expressed interest in bailing out Iridum since the company filed for Chapter 11 bankruptcy protection in August, and only two overtures have progressed far enough to be acknowledged publicly by Motorola.
The first, in February was from wireless magnate Craig McCaw for an undisclosed amount that some reports estimated at more than $500 million. The second, in June, was for $50 million by the investment firm Castle Harlan. Both bids were withdrawn after those parties decided they couldn't turn Iridium into a viable business.
Generally speaking, ``The process has been that Iridium takes a look at these bids and has in the past made requests that (Motorola) hold discussions with these parties, and currently we are not holding any discussions with outside parties,'' said Scott Wyman at Motorola. ``We are still going down the path of decommissioning the satellites.''
Iridium was given court permission to destroy the constellation in March, but Motorola has kept the satellites running at a cost it estimates at $10 million per month, hopeful that a new investor might emerge.
More recently, however, Iridium has sought court injunctions to prevent Motorola from destroying the constellation to allow the satellite company more time for last-minute negotiations with potential saviors.
Earlier this week, Iridium sent a letter to Motorola complaining that Motorola has hindered those efforts by making unreasonable demands during ``active negotiations with third parties who have made offers to purchase the constellation of satellites.''
Washington-based Iridium launched its ``anywhere-on-Earth'' mobile phone service in the fall of 1998, but filed for bankruptcy protection by last August with debts of $4.4 billion.
From the outset, Iridium customers complained about inconsistent service, bulky $3,500 handsets and calling charges as high as $9 a minute. Prices were slashed last summer for both calls and the handsets, but Iridium's subscriber count only reached about 55,000 by the time commercial service was halted earlier this year. |
