Monday May 1, 10:03 pm Eastern Time - Motorola still hopes to find a buyer for Iridium
By Emily Kaiser
SCHAUMBURG, Ill., May 1 (Reuters) - Technology company Motorola Inc. (NYSE:MOT - news) said on Monday it still
hoped to find a buyer for Iridium LLC, the financially troubled satellite telephone company it bankrolled, and the satellites have not yet been destroyed.
``It is in a phase right now where it is still accepting.... offers,'' Robert Growney, Motorola's president and chief operating officer, said at Motorola's annual meeting
here.
``Hopefully very soon we will see a new operator of Iridium emerge,'' Growney said.
The 66 satellites that allow users to make phone calls from anywhere in the world were still in orbit and functional, Growney said, despite plans announced in March
that had called for them to be taken out of orbit.
In an interview with reporters after the annual meeting, Motorola Chairman Chris Galvin declined to give further details or name potential buyers, and said any
decisions on Iridium's future would be made by the bankruptcy court.
``This is a process that is being managed by the courts,'' he said, adding that the specific details were confidential.
Iridium filed for bankruptcy protection in August after it failed to sign up enough subscribers and defaulted on more than $1.5 billion in loans. Critics of the $5 billion
project have said it was too pricey and that Iridium misjudged the rapid expansion of cheaper, land-based wireless phones which made a satellite service
unnecessary for many potential customers.
In March, Iridium said its efforts to attract a qualified buyer were unsuccessful, and it would begin pulling its satellites out of orbit, letting billions of dollars worth of
space-age communications gear literally burn up in the atmosphere.
Motorola was the primary financial backer of Iridium and also owns roughly an 18 percent stake in the company. Iridium was once seen as a brilliant idea with huge
profit potential, but Motorola has since recorded more than $2 billion in charges to cover its financial exposure to the failed project.
Several groups have come forward offering plans to use the satellites, but Iridium said in March that none of those was viable. Galvin declined to comment on
whether any new bidders had emerged since then or if any plans now seemed viable.
Galvin said a charitable organisation, which he declined to name, had expressed some interest in Iridium, but he acknowledged that it would be difficult for such a
group to foot the steep bill of operating a satellite system.
``People will look at (acquiring Iridium) for a whole host of well-intentioned reasons, but it requires a lot of paying customers,'' Galvin said.
That was precisely the problem Iridium ran into. It failed to sign up the globe-trotting executives it had originally hoped would be interested in satellite telephone
service.
A $600 million plan by cellular phone pioneer Craig McCaw to rescue the company fell apart in March when McCaw and his investment group backed out of the
deal.
Later in March, a small software and e-commerce company said it had offered a plan to rescue Iridium from bankruptcy. In April, Iridium's regional associate,
Iridium Middle East, said discussions about a rescue package were continuing, although it declined to name the small software company. |
