Iridium hires DLJ for advice on debt restructuring
Thursday May 13, 6:22 pm Eastern Time
WASHINGTON, May 13 (Reuters) - Global satellite telephone company Iridium LLC
(IRID - news) said Thursday it had hired investment bank Donaldson Lufkin & Jenrette to
advise it onrestructuring its debt and reducing its financing costs.
The company, which operates 66 satellites that allow customers to make wireless telephone
calls almost anywhere in the world, is in talks with the lenders of its $800 million credit
facility.
Iridium has had problems meeting revenue and subscriber growth targets that were conditions of its loans. It has said it no
longer expects to have 27,000 satellite subscribers by May 31, for example. At the end of March, Iridium had 10,294
customers.
The lenders have granted Iridium temporary waivers of the loan covenants. The company expects to complete the negotiations
by the end of the month.
DLJ has extensive satellite financing experience, Iridium said.
A day earlier, Iridium named senior vice president Leo Mondale to the post of chief financial officer. The company is still
looking for a new chief executive since CEO Edward Staiano left in April due to disagreements with the board over strategy.
Washington-based Iridium lost $505.4 million in the first quarter, 42 percent more than in the year-earlier period, on revenues
of just $1.45 million.
Results have been hurt by slow production and distribution of phones by suppliers, quality problems with certain handsets, and
problems with training and equipping enough salespeople.
Iridium, a consortium formed by telecommunications and industrial companies, was founded by Motorola Inc. (MOT - news),
which still owns a 20 percent stake. Iridium shares rose 25 cents, to $14.50, in trade Thursday on the Nasdaq stock exchange.
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