Iridium set to rise from the ashes
By Anne Young, Total Telecom
17 November 2000
A new company called Iridium Satellite LLC is on the verge of buying the assets of the bankrupt mobile satellite services company Iridium LLC, according to reports Thursday.
But official confirmation of the reports proved more elusive than a satellite phone connection from the erstwhile operator.
A spokesman on behalf of the new Iridium Satellite said such a company has been set up, but it is as yet far from being a fully fledged corporation. He did confirm that the person behind the venture is airline veteran Dan Colussy, who in the past has run Canadian Pacific Airlines and Pan American World Airlines.
Colussy is currently a director of Baltimore-based Constellation Energy Group.
The spokesman added that a ruling on whether the new venture could buy the assets was made Thursday. But there has been no official confirmation of approval from the bankruptcy court to transfer the assets to Iridium Satellite LLC.
Reports from various sources said the assets, including the 66-satellite Iridium constellation, would be acquired for around US$25 million by Colussy and a group of investors. Some reports said the U.S. Bankruptcy Court for the Southern District of New York had officially approved Iridium Satellite's bid to buy all assets of Iridium and its subsidiaries.
Some news sources reported that Iridium Satellite released a statement late Thursday, saying it plans to relaunch affordable satellite communications services to companies in industries that have a need for satellite communications - heavy industry and maritime, aviation and adventure businesses - within 60 days. The new company also plans to market commercial satellite communications to the U.S. government and to humanitarian groups, according to the reports.
A spokesman for Motorola, the main investor in Iridium, was also unable to confirm that the assets had been acquired. Motorola had previously gained approval from the court to take the satellites out of orbit, allowing them to burn up in the earth's atmosphere. It now seems that the satellites will be left intact.
The spokesman said Motorola "is obviously pleased that this newly organized company has decided to buy the assets."
Some may wonder if this is actually the case: after spending billions of dollars on building the satellites, plus millions of dollars per month on maintaining the constellation, the suspicion is that Motorola would be glad to see the back of the whole project.
The spokesman said Motorola believes the deal with the new firm will be concluded by the end of this month, at which point Motorola will cease all maintenance payments.
Boeing Co. of Seattle is said to have been given the contract to maintain the satellites in the future.
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