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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: RMiethe who wrote (5360)	6/25/1999 12:22:00 AM
From: djane	Read Replies (2) \| Respond to of 29987

Iridium LLC's Structure Discourages Bankruptcy, Analysts Say Washington, June 24 (Bloomberg) -- Iridium LLC, which runs the first global satellite-telephone network, likely will avert a bankruptcy filing because of the way that it's structured and greater interests of its major shareholders, analysts said. Iridium is 86-percent owned by strategic investors, including 18-percent owner Motorola Inc., whose own businesses stand to profit from Iridium's. They include service providers that sell Iridium service worldwide, and ''gateway'' operators that connect Iridium's satellites to public-telephone networks. A restructuring is likely to differ from the norm because Iridium needs the gateway operators to survive, analysts said. Creditors cannot take all the shareholders equity in the usual bankruptcy scenario because, if they do, they'll be left with a useless system. ''This is by no means a normal bankruptcy situation,'' said Armand Musey, a C.E. Unterberg Towbin analyst who has a ''hold'' rating on the stock. ''It's absolutely critical that these strategic partners stay on board. The debt holders have to leave something on the table for the equity holders, or the company is effectively worthless.'' Investors are betting that when Iridium is restructured the bondholders will take a big discount on what they are legally entitled to so that the strategic investors stick around, Musey said. The creditors ''have a gun to their own head,'' said Lehman Brothers Inc. analyst John Bensche, who has a ''buy'' rating on the stock. Iridium shares rose 7/16 to 13 1/2. They've risen 74 percent this week. NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min. Access More Information and Services Above ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.