Good Article- prophecy is fulfilled-
Associated Press
Wireless Pioneer to Control Globalstar
Monday April 28, 3:43 pm ET
Wireless Pioneer Craig McCaw to Control Bankrupt Satellite Phone Provider Globalstar
NEW YORK (AP) -- Wireless communications pioneer Craig O. McCaw is taking control of bankrupt satellite phone provider Globalstar in a $55 million deal that arose after Globalstar's creditors rejected two other bids for the company.
The deal, approved by a bankruptcy court late Friday and formally announced Monday, gives McCaw's ICO Global Communications Ltd. a 54 percent stake in Globalstar, which burned through $4 billion before filing for Chapter 11 last year.
London-based ICO -- which counts McCaw as its chairman and international telecommunications companies and Microsoft founder Bill Gates as investors -- has been developing its own phone and data satellite service. It has launched two satellites, but one was destroyed during the launch.
Globalstar has 52 satellites and 88,000 customers worldwide. The San Jose, Calif.-based company has seen business in the Middle East spike in recent months from journalists and other people working in the region because of the war in Iraq, spokesman Mac Jeffrey said.
A rival satellite phone company, Iridium Satellite LLC, also remains afloat after bankruptcy reorganization, helped largely by a big Pentagon contract.
The remaining 46 percent stake in Globalstar will be held by its creditors, including original investors Loral Space & Communications Ltd. and Qualcomm Inc.
In January, Globalstar reached a deal that called for an investment firm headed by financier Bennett LeBow to pay $55 million for 51 percent of the company. Creditors rejected that plan, as well as a subsequent deal in which Thermo Capital Partners was going to pay $55 million for a 66 percent stake.
Jeffrey called the ICO deal "a great partnership" because "unlike the other two, they are clearly in it for the long haul. This does not appear to be a speculative investment."
McCaw built an early cell phone company that he sold to AT&T Corp. for $11.5 billion in 1994. Another McCaw investment, Teledesic, envisioned as a high-speed Internet service transmitted via satellite, was put on ice last year after 12 years of planning.
McCaw acknowledged that despite spending $12 billion developing its technology and services, the mobile satellite communications industry largely has been a failure.
"We believe that the $4 billion spent thus far on Globalstar, however, will result in useful services for governments, corporations and communities around the world," McCaw said in a statement. "We like the Globalstar system architecture and see this as a turning point for the industry and for Globalstar in particular." |
