Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Marty Rubin who wrote (2237)	8/3/1999 1:05:00 PM
From: Marty Rubin	Read Replies (1) \| Respond to of 2693

Iridium Says Chase Asserts $800 Mln Loan in Default Washington, Aug. 3 (Bloomberg) -- Iridium LLC, which is struggling for money to run its global satellite-telephone business, said Chase Manhattan Corp. is trying to reinforce its negotiating position by claiming default on an $800 million loan. Chase also claims that Iridium is required to demand that Motorola Inc., Iridium's largest investor, provide a $300 million guarantee to back up the loan, according to an Iridium regulatory filing. Iridium and Motorola deny Chase's assertions, according to the filing with the Securities and Exchange Commission. Motorola and Iridium, whose costly phone service hasn't attracted as many users as hoped, are trying to stave off a court- imposed bankruptcy reorganization by reaching a negotiated settlement with banks, bondholders and equity investors. While Iridium said Chase's action won't have a ''significant'' effect on the negotiations, analysts suggest Chase is moving to protect the hundreds of millions the banks have lent to Iridium. ''They are turning up the heat,'' said Armand Musey, an analyst at Banc of America Securities. Shares of Washington-based Iridium World Communications Ltd., the publicly traded arm of Iridium LLC, rose 3/16 to 6 15/16 in late morning trading. Musey has a ''hold'' rating on the stock, which has tumbled almost 85 percent the past year. Officials at Chase Manhattan weren't immediately available to comment. Iridium said in its filing that Chase's claims were made in a letter from the bank to Motorola dated July 29. Motorola owns 18 percent of Iridium LLC. The $800 million loan was arranged by Chase and Barclays Plc and syndicated to a group of 23 banks and institutional investors. Iridium received on June 30 a third extension of a deadline to meet terms on the loan. The next deadline is Aug. 11. ''When you are the banks, you want to have as much money guaranteed by Motorola as possible,'' said J.P. Morgan Securities analyst Marc Crossman, who has a ''market underperform'' rating on the stock. ''Chase is sending a signal here. There has to be a line between Motorola and Iridium.'' Motorola, based in Schaumburg, Illinois, helped found Iridium 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. Aug/03/1999 11:22 (C) Copyright 1999 Bloomberg L.P.