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To: djane who wrote (8103)	11/2/1999 12:31:00 AM
From: djane	Respond to of 29987

NYTimes. Executive to Raise at Least $1.2 Billion to Aid ICO November 2, 1999 By DAVID BARBOZA raig O. McCaw, the cellular telephone pioneer, said Monday that he had agreed to raise at least $1.2 billion to take ICO Global Communications Ltd. out of Chapter 11. The move by McCaw, who is expected to gain control of the bankrupt company, is a big vote of confidence in the struggling global satellite telephone business, which had been saddled last summer by two high-profile bankruptcies and growing doubts about its viability. McCaw -- who is also a large investor in Teledesic L.L.C., the so-called "Internet in the sky" satellite venture scheduled to begin operating in 2004 -- is also considering taking a large stake in Iridium L.L.C., another global satellite telephone venture that filed for bankruptcy protection last summer, according to a spokesman for McCaw. "He thinks there's a business to be stabilized and an opportunity to be realized here," Robert Ratliffe, a vice president at Eagle River Investments L.L.C. in Bellvue, Wash., a company that McCaw operates, said of his ICO investment. "He sees satellites as a tremendous vehicle to deliver services globally." The investment, which will occur in three rounds over the next eight months, is expected to help ICO Global Communications complete its bankruptcy reorganization plan by early next year, finish building its network of 12 satellites and 12 earth stations, and start global telephone service by early 2001, the company said. "This is a validation of the business plan we have in place," said Patrick McDougal, a senior vice president for corporate development at ICO, which is based in London. "The meaningfulness of this is that it will help us get out of Chapter 11." According to the agreement, McCaw will eventually gain voting control over ICO in exchange for raising at least $1.2 billion through his affiliated companies, Teledesic L.L.C. and Eagle River Investments, as well as a group of international investors. Existing investors in ICO are also expected to participate. The company has already spent more than $3.4 billion to begin service. The deal, however, still needs approval of bankruptcy courts in Delaware, the Cayman Islands and Bermuda. "I can't say anything right now, we're in negotiations," said Luc Despins, a lawyer at Milbank Tweed Hadley & McCloy in New York, a lawyer who represents an informal committee of ICO bondholders. Although it is unclear whether ICO will have any relationship with Teledesic -- which aims to deliver broadband Internet access over a global satellite network -- officials at ICO and Teledesic said there could be some synergies or agreements between the two companies, both of which will be largely controlled by McCaw. "It is not clear that Teledesic will be involved in ICO," McDougal at ICO said. "It's too early to say. But certainly it is clear McCaw sees synergies between what ICO is ready to do and what Teledesic has ambitions to do." Although ICO is not prepared to start broadband service, the company says that its system is flexible and that when it begins operating, the satellite service will be able to send data and offer multimedia and Web browsing capabilities as well as telephone service virtually anywhere around the world. Armand Musey, an analyst at Banc of America Securities, said McCaw's investment indicated that he was a firm believer that satellite service will eventually deliver telephone and Internet service, and that he could get a foothold in the industry at bargain basement prices, and thereby pave the way for the beginning of Teledesic in 2004. "He held all the cards because if he didn't come in they could look at getting nothing," Musey said. "ICO and Iridium absolutely need outside investors. So it looks like he looked at the two companies and then went with ICO first because it has data capabilities." McCaw said in a statement Monday: "It is our hope that by working with ICO's team and international partners we can bring the company back to good health and make a contribution to global communications." Ratliffe, a spokesman at Eagle River, said McCaw's investment was another attempt to revive a struggling company, just as he did at Nextel Communications Inc. "There's an analogy to Nextel. Craig saw a way to modify the engineering there," Ratliffe said. "Here's a service provider who is focused on the customer. There just aren't many situations where a manufacturer is a successful service provider." Copyright 1999 The New York Times Company