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

To: moby_dick who wrote (2244)	8/3/1999 4:07:00 PM
From: Diogeron	Read Replies (1) \| Respond to of 2693

Actually, the last gasp of the true believers is kind of sad. Their loyalty is reminiscent of the final posts before Bre-X imploded with collateral damage to the common equity holders left holding the ol' proverbial bag. If Iridium comes back from the dead, I'll gladly eat my words on this thread. (Hey, wonder if Calvin Trillin needs any help composing his couplets for The Nation magazine)?

To: moby_dick who wrote (2244)	8/3/1999 6:05:00 PM
From: jjs_ynot	Respond to of 2693

Dow Jones Online News, Monday, August 02, 1999 at 17:46 NEW YORK -(Dow Jones)- Shares of Iridium World Communications Ltd., the publicly traded arm of ailing satellite-phone project Iridium LLC, surged Monday on rumors that the venture is close to an agreement with its lenders and chief investor, Motorola Inc. Shares of Iridium (IRID) advanced $1.125, or 20%, to settle at $6.75. Motorola is scheduled to hold a meeting with analysts Tuesday and Iridium is expected to be a hot topic. The Iridium project originated with Motorola, which has an 18% stake and continues to be deeply involved. Iridium is undertaking an ambitious plan to provide world-wide wireless communications through a network of orbiting satellites but has made disappointing progress in winning asmany customers as its creditors require. The 66-satellite project took 10 years and $5 billion to get off the ground. Iridium last month exercised a right to extend the payment date for $90 million in interest on its high-yield bonds, heightening concern that Iridium might miss the payment and file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The news came one day after Motorola said the project may have to be shut down in bankruptcy-court proceedings because of huge losses unless its investors can agree on a restructuring plan. There has been speculation that Motorola (MOT) has offered to invest an additional $400 million in Iridium if bondholders agreed to exchange $1.5 billion in junk debt for a 25% equity stake in Iridium. "We're still having very productive negotiations with all of our creditors," Iridium said. But it said nothing has been signed. "There's probably some fire behind the smoke," Lehman Brothers Inc. analyst John Bensche said. He noted that "there's so many people involved" in the negotiations - including banks, bondholders, Iridium and its corporate backers - that leaks would be difficult to plug completely. Making the need for a deal even more urgent, waivers granted by Iridium's bank lenders covering violations of loan conditions will expire on Aug. 11, and the 30-day grace period for the $90 million interest payment Iridium missed on its junk bonds will run out on Aug. 15. In recent weeks, Iridium has said that filing for bankruptcy protection isn't a realistic option for the venture. Bensche said some of the lenders involved in the Iridium talks may have leaked Motorola's planned infusion in order to gauge investor reaction. If bondholders agree to the offer, Iridium's "public equity shareholders would be diluted," he said. The rumored agreement would bring Motorola's stake in Iridium up to 40%, according to J.P. Morgan Securities Inc. analyst Marc B. Crossman. When rumors of the agreement first materialized last week, Iridium shares rose, Crossman said. Crossman, who has a short position in Iridium stock, said that by converting Iridium's junk debt into stock, only $200 million out of the company's nearly $400 million in annual financing costs would be eliminated. Also, the satellite phone company will still need to cope with maintenance and operating costs of $540 million a year, he said. "Motorola may agree to vendor finance (those costs), but it's still a liability for Iridium," Crossman said. Iridium started with a plan to sell satellite-phone service to travelers needing communications options in remote regions without access to cellular services. But technology glitches, competition and high costs hurt demand for Iridium's high-tech phones, and by the first quarter, it had only 15,000 subscribers. Recently, Iridium has revamped its marketing plan, trimmed costs and reduced spending in an effort to avoid running out of money. Motorola said in mid-July it had set up reserves to cope with Iridium, a cache some observers have estimated at about $1 billion. Copyright (c) 1999 Dow Jones & Company, Inc. All Rights Reserved.