Iridium Shares to Be Worthless After Restructuring (Update1)
quote.bloomberg.com
Iridium Shares to Be Worthless After Restructuring (Update1)
(Adds comment from Iridium spokeswoman in 6th paragraph,
analyst comment in the 7th paragraph.)
Washington, Dec. 9 (Bloomberg) -- Iridium LLC, the satellite-
telephone company that filed for bankruptcy protection in August,
said its stock, now valued at about $953 million, will likely be
worthless after its planned reorganization.
Iridium made the announcement today after shares of its
publicly traded arm, Iridium World Communications Ltd., rose
1 1/2 to 6 3/8.
Iridium filed for bankruptcy protection after failing to
attract enough subscribers to its 66-satellite global telephone
network. Iridium World shares were delisted from the Nasdaq
National Market Nov. 22 and now trade on the so-called pink
sheets.
Iridium also said it received a commitment from its current
investors, led by Motorola Inc., for $20 million in funding to
keep the company operating while it tries to reorganize. Motorola
is its largest equity investor with about an 18 percent stake.
Washington-based Iridium said it will make a request for
approval of the new funding in bankruptcy court tomorrow in New
York. It will seek an extension of its cash collateral, which
expires Dec. 15., through Feb 15.
The funding from Motorola follows a report last week that
cellular pioneer Craig O. McCaw is close to buying Iridium.
Iridium spokeswoman Michelle Lyle, who declined to comment on the
purchase, said the money from Motorola gives Iridium more time to
negotiate with potential buyers.
''The fact that they are putting in money leaves it open
that a restructuring is possible,'' Banc of America Securities
analyst Armand Musey said. ''Insiders would not put this money in
if they were pretty sure they were going to be shutting it
down.'' |
