Current Issue
May 28, 2001
Digest Archive
May 21, 2001
May 14, 2001
May 7, 2001
April 30, 2001
April 23, 2001
April 16, 2001
April 9, 2001
April 2, 2001
March 26, 2001
March 19, 2001
March 12, 2001
March 5, 2001
February 26, 2001
February 19, 2001
February 12, 2001
February 5, 2001
January 29, 2001
January 22, 2001
January 15, 2001
January 8, 2001
December 18, 2000
December 11, 2000
December 4, 2000
November 27, 2000
November 13, 2000
November 6, 2000
October 30, 2000
October 23, 2000
October 16, 2000
October 2, 2000
October
9, 2000
October
2, 2000
September
25, 2000
September
18, 2000
September
11, 2000
September
4, 2000
August
28, 2000
August
21, 2000
August
14, 2000
August
7, 2000
July
31, 2000
July
24, 2000
July
17, 2000
July
10, 2000
June
26, 2000
June
19, 2000
June
12, 2000
June
5, 2000
May
29, 2000
May
22, 2000
May
15, 2000
May
8, 2000
May
1, 2000
April
24, 2000
April
17, 2000
April 10, 2000
April
3, 2000
March
27, 2000
March
20, 2000
March
13, 2000
|
|
|
Iridium
Fails To Find Buyer, Proceeds With Liquidation
|
Iridium
told U.S. bankruptcy Judge Arthur Gonzalez that of the 80+ bidders
for its assets “no
bid was received which was a qualified bid,” and asked
for permission to end
commercial service to its remaining customers. (The March
17 hearing was heard by Judge Arthur Gonzalez, due to a scheduling
problem for Judge Cornelius Blackshear.) Though there were dozens
of parties interested in bidding for Iridium, none met a US$10
million cash deposit requirement. The
judge authorized US$8.3 million to
cover expenses through April 30 to close down operations. As
a
courtesy to customers Motorola has decided the satellites will be
kept running and limited phone service will continue in North
America and possibly other regions of the world. The
“deorbit” plan, which will cost US$30 - US$50 million to
implement, will require Motorola to write special software to
program the satellites’ descent (the cost to most likely be
absorbed by Motorola). The programming phase could take as long as
nine months, and the removal from orbit of all of the satellites
might take up to two years. Motorola has already contacted the
U.S. government to get the necessary clearances for deorbiting the
satellites. Bondholders
have been granted permission by the court to sue Motorola for more
than US$2 billion. They allege that Motorola extracted more than
US$1 billion from Iridium after it became insolvent and
manipulated it to the company's own benefit. The US$3.7 billion
bankruptcy is one of the largest in the past five years. Iridium
has said its common shares and debt is likely worthless.
Iridium’s 14 percent notes due in 2005 are trading at about 2
cents on the dollar. Globalstar USA, has authorized its
distributors to offer trade-ins on Iridium handsets. Globalstar is
offering several plans to Iridium users, ranging from US$295 to
US$500, depending on the service plan and hardware being
purchased. Motorola, which built and operated Iridium, was so
focused on making the system work that it apparently didn't pay
enough attention to shifting market conditions. In the late 1980s,
when Motorola began work on the Iridium concept, mobile telephones
were a niche product with very limited service areas, but by the
time the US$5 - 7 billion system was built and service inaugurated
in November 1998, cell phones had proliferated and become
compatible with terrestrial networks. Iridium ended its legacy
with only 55,000 customers, while needing 200,000 –
600,000. More than 160 countries had licensed Iridium’s service.
Interest in Iridium’s fate has been strong in the commercial
space industry because of fears that if Iridium does fail, it
could have a negative impact on commercial space ventures in
general. Companies planning communications satellite systems could
find it more difficult to raise funding, which in turn would
decrease the market for launches, making it harder for new
reusable vehicles to enter the market.
More
Information
COPYRIGHT
©
2000 SPACEandTECH
Digest SpaceandTech.com
SPACEandTECH Digest is a weekly roundup of the latest industry news of interest
to the space professional. SPACEandTECH Flash! is an internet push
service offered by Andrews Space & Technology to bring the
latest on orders, launches, and important breaking news to your
desktop. SPACEandTECH Digest and SPACEandTECH Flash! are part of
the Andrews Space & Technology www.spaceandtech.com
website, a website designed to serve the information needs of the
space industry.
If you would like to subscribe to the SPACEandTECH
Flash!
(currently a free service), contact the www.spaceandtech.com
Editor-in-Chief, Joe Hopkins, at editor@spaceandtech.com
|
|
|
|
|
