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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (3357)	3/11/1999 6:06:00 PM
From: djane	Respond to of 29987

Different view on I/ICO financing [This article may be dated after I recent problems] telecoms-mag.com Iridium Loans Lift Satellite Hopes NEW YORK -- Over the past few months, satellite operators have had a difficult time obtaining that which is fundamental to their business -- financing. In what the sector will surely receive as good news, Iridium LCC, operator of the world's first global mobile personal communications service, has managed to finalise US$ 1.92 billion in new funding. The loans include a secured bank facility worth US$ 800 million and a US$ 750 million guaranteed credit facility from Chase Securities of New York and Barclays Capital, an arm of Barclays Bank, UK. Iridium also sealed a deal with Motorola, which owns a 20 per cent stake in the venture, to postpone repayments of up to US$ 400 million on Motorola's US$ 500 million maintenance contract for the satellite system until December 2001. Along with competing satellite communication ventures including Globalstar, ICO Global Communications, Iridium has struggled to find lenders for what is regarded by some as a high-risk project. However, US-consultancy, Frost & Sullivan, is optimistic about the future of these next generation systems, expecting cumulative investment of around US$ 19 billion by 2004. Iridium expects the new funds to carry the company until its business generates enough revenues to become self-sufficient. “We now have ample funds to take us through cash flow break-even with considerable head-room,” said the organisation's CEO, Edward Staiano. However, Iridium has yet to clarify when it expects this to occur. To have secured this additional funding, “Iridium must have convinced its backers that it will be able to carry out its strategy and market its product,” commented one analyst from a major London investment house. “This can only buoy the hopes of other operators in search of funding,” he added.