ICO and Teledesic Drop Merger Plans

Teledesic Corp. and New ICO have dropped plans to merge into a single company. New ICO will instead merge with New ICO Global Communications (Holdings) Ltd., pending shareholder approval. ICO Global was previously known as ICO-Teledesic Global Limited. The decision to not merge ICO and Teledesic was made "To maintain maximum flexibility in this market, it is prudent to keep ICO and Teledesic independent as the needs for satellite services continue to evolve in the changing international landscape." ICO and Teledesic will continue to pursue their independent  business plans. It is possible that a merger between the two companies may be reconsidered in the future.

ICO Global Communications was established in January 1995 as a private company, spun off from INMARSAT (International Mobile Satellite Organization) to provide global mobile personal communications services by satellite, including digital voice, data, facsimile, high-penetration notification, and messaging services. ICO Global Communications was listed on Nasdaq in July 1998. The stock was suspended from trading when the company filed for Chapter 11 protection on August 27, 1999. In October 1999, Eagle River Invesments LLC, Craig McCaw's private investment company, agreed to underwrite an additional US$500 million for exit financing, to the extent that this financing is not provided by other investors. Craig McCaw is chairman of New ICO, Teledesic Corp. and Eagle River Investments. On December 3, 1999 the U.S. Bankruptcy Court in Wilmington, Delaware, granted final approval to ICO's DIP financing in the amount of US$500 million. The first tranche of US$225 million is being funded by a group of investors led by Craig McCaw and Eagle River. In connection with entering into the agreement with Eagle River, ICO entered into memoranda of understanding with Hughes Space & Communications and NEC, to modify the agreements with those vendors. This US$500 million was part of a US$1.2 billion McCaw-led financial restructuring of New ICO. The McCaw-led investment was to be applied toward the completion of the build-out of ICO's system and toward the company's working capital requirements prior to the launch of its global mobile satellite communications services. New ICO emerged from Chapter 11 on May 17, 2000.

Teledesic was founded in 1990. In March 1997, the U.S. Federal Communications Commission (FCC) granted Teledesic a Ka-band license for a non-geostationary orbit constellation. Teledesic LLC is in negotiations with satellite manufacturers Alenia Spazio and Lockheed Martin Commercial Space Systems, as the two finalists to build Teledesic's satellite communications network. Teledesic intends to select one prime contractor and finalize its contract this fall. Alenia Spazio was responsible for integration and testing on the Globalstar program. It built a factory in Rome that can be readily used for manufacturing Teledesic's satellites. Lockheed Martin Commercial Space Systems was the supplier of the Iridium satellite bus. Teledesic is a private company located in Bellevue, Wash., a suburb of Seattle.

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