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Technology Stocks : IRID - Iridium World Communications IPO Announced! -- Ignore unavailable to you. Want to Upgrade?

To: Marty Rubin who wrote (2210)	7/28/1999 9:30:00 AM
From: Marty Rubin	Respond to of 2693

Motorola Offers to Inject $400 Mln in Iridium, Investors Say Washington, July 27 (Bloomberg) -- Motorola Inc. last week offered to put another $400 million into cash-strapped Iridium LLC if bondholders agree to swap $1.5 billion in debt for a 25 percent stake in the global satellite-telephone company, said investors familiar with the plan. Motorola's proposal, made to a group that owns two-thirds of Iridium's bonds, calls for the world's second-largest cellular- phone maker to increase its stake in Iridium to 40 percent from 18 percent, the investors said. Motorola, which has written off at least $126 million of its $2.2 billion in financial guarantees to Iridium, declined to comment. Iridium spokeswoman Michelle Lyle said the information about Motorola's proposal is ''inaccurate,'' and declined to elaborate. Iridium Chief Financial Officer Leo Mondale said yesterday that Iridium is negotiating with its creditors. Under Iridium's plan, equity holders would receive some compensation, he said. ''I doubt the bondholders will be interested'' in Motorola's proposal, said William Kidd, an analyst at C.E. Unterberg Towbin, who has a ''sell'' rating on Iridium. ''That sounds ludicrous.'' The bondholders include Alliance Capital Management LP and Conseco Capital Management, according to one investor. Those companies couldn't immediately be reached for comment. The Motorola proposal, called Project Asteroid, would give Iridium enough money to stay afloat and help it avoid a court- imposed reorganization, which could take years to resolve. Iridium has been unable to attract subscribers because of the high cost of its phones and expensive per-minute charges, though it recently cut the price of its service and products. It has said also that the threat of bankruptcy is hampering sales efforts. Terms Shareholders of Iridium World Communications Ltd., the publicly traded arm of Iridium, would see their 14 percent stake in the parent company shrink to almost zero, the investors said. Shares of Iridium World have fallen almost 90 percent in the past 12 months to 6 5/16, a loss of more than $400 million in market value. Motorola is one of 19 companies with an equity investment in Iridium LLC. Under its proposal, the other 18 equity investors would have to agree to have their stake reduced to 35 percent from 68 percent. That group includes the so-called gateway operators -- Veba AG of Germany, Sprint Corp. and other companies that connect Iridium's satellites to public-telephone networks and hold the licenses for Iridium service. Motorola, based in Schaumburg, Illinois, helped found the company in 1987 and has been the marquee name behind the initiative ever since. Motorola makes some of Iridium's phones and also has a $2.5 billion operations-and-maintenance contract with Iridium. Chase Manhattan Corp. and Barclays Plc organized $800 millions in loans to Iridium. Payment on the loans are currently in a third extension period, which ends Aug. 11. Jul/27/1999 19:58 (C) Copyright 1999 Bloomberg L.P.

To: Marty Rubin who wrote (2210)	7/28/1999 9:31:00 AM
From: Marty Rubin	Read Replies (1) \| Respond to of 2693

More US Consumers Using Wireless Phones Only, USA Today Says Washington, July 28 (Bloomberg) -- More U.S. consumers are disconnecting their home telephones and opting for wireless alternatives, USA Today reported, citing a survey conducted by the Yankee Group consulting firm. The survey found that 2 percent of all U.S. wireless customers use their wireless phones only, up from an unmeasurable few in 1998, and customers have shifted about 12 percent of their regular phone calls to wireless, USA Today said. Wireless phone use is growing because of falling prices and increasing quality and will increase more than fourfold by 2004, reaching 554 billion minutes of traffic by 2004, up from 105 billion minutes of use in 1998, USA Today reported, citing Yankee Group analyst Mark Lowenstein. Motorola Inc., the world's second-largest cellular phone maker, last week offered to put another $400 million into cash- strapped Iridium LLC if bondholders agree to swap $1.5 billion in debt for a 25 percent stake in the global satellite-telephone company, investors familiar with the plan said yesterday. (USA Today 7/28 A1 www.usatoday.com) Jul/28/1999 7:21 (C) Copyright 1999 Bloomberg L.P.