Motorola Says Iridium Support Hinges on Other Contributors
Schaumburg, Illinois, July 13 (Bloomberg) -- Motorola Inc., the biggest investor in Iridium LLC, said it won't commit any more money to the cash-strapped satellite communications provider unless other investors and lenders kick in more funds.
Motorola, which has an 18 percent stake in Iridium and has guaranteed at least $1.67 billion, took a $126 million charge in the second quarter to write down the value of Iridium's bonds. The bonds have fallen about 80 percent this year as the Iridium has struggled to attract customers.
Schaumburg, Illinois-based Motorola was one on the founders of Iridium in 1987 and built the 66 satellites that make up the network. Iridium has been unable to attract enough subscribers to pay its bills, and now the company, investors and lenders are devising plans to keep it from bankruptcy.
''Motorola will not provide any further support beyond existing contractual commitments unless there is substantial participation in the Iridium LLC restructuring from all parties with a significant financial interest,'' Motorola said.
Iridium is 86 percent-owned by 19 strategic investors, which include Lockheed Martin Corp., Raytheon Co., Sprint Corp., and American International Group Inc.
Iridium shares, which have fallen nearly 80 percent this year, rose 1/4 to 8 3/16. Motorola fell 2 1/2 to 96 1/2. Motorola announced the charge after the close of U.S. trading.
Jul/13/1999 19:52
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