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

To: puddinhead who wrote (2298)	8/10/1999 4:37:00 PM
From: Marty Rubin	Respond to of 2693

Iridium faces deadlines on loans, payments NEW YORK, Aug 10 (Reuters) - Satellite telecommunications company Iridium LLC <IRID.O>, which faces two important deadlines in the next five days, is expected to resolve its debt woes shortly through a restructuring agreement with its bondholders and lenders, analysts said on Tuesday. Iridium on Wednesday must meet certain revenue and customer targets as required under its $800 million bank loan or face default. Iridium has already received three extensions from its lenders. Iridium, which provides global phone service through its $5 billion network of 66 satellites, has suffered from slower-than-expected subscriber growth, marketing and distribution missteps and previous technical problems with its telephone handsets. Iridium is in talks to restructure its debts, but it may seek another extension on the revenue and customer targets until the reorganization plan can be finalized, analysts said. "It appears that they're moving closer to a resolution. They may get a waiver for another few days but we should be hearing something soon on how this will be resolved," said Merrill Lynch analyst Thomas Watts. "Negotiations are still continuing on a regular basis. They are progressing but it would be inappropriate for me to comment further at this time," said Iridium spokeswoman Michelle Lyle. Earlier this month, lead lender Chase Manhattan said Iridium technically defaulted on the loan and Motorola Inc. <MOT.N> must guarantee $300 million of $800 million loan. Iridium and Motorola contended, however, that Iridium was not in default and no "triggering" event occured that required the guarantee. Iridium faces another deadline on Aug. 15. It must meet a $90 million interest payment on its $1.45 billion in bonds. The payment was originally due July 15, but Iridium exercised a 30-day grace period. Motorola, which owns 18 percent of Iridium and is the primary financial backer, has raised the possibility that Iridium would have to liquidate. Motorola has said it would provide more funding for Iridium if other backers also contributed. Analysts expect Iridium's bondholders to swap one-half to two-thirds of their securities for new debt that is convertible into Iridium common stock. Iridium's stockholders will likely see their equity stake diluted by more than half, analysts said. Motorola and other investors may offer Iridium another $400 million to $500 million in loans to ease its cash-crunch, with Motorola guaranteeing the additional funding, analysts said. Motorola was not immediately available to comment. Iridium has cut about 15 percent of its 550 workers, slashed prices to boost subscriber growth and strengthened its sales and marketing efforts. Shares of Iridium traded at 6-3/16, down 1/16, on Nasdaq on Tuesday. The stock has fallen more than 500 percent so far this year. Iridiums bonds have been trading at about 20 cents on the dollar in recent weeks. 16:13 08-10-99