ICO Emerges From Bankruptcy; To Merge With Teledesic

New ICO, formerly ICO Global Communications, has emerged from Chapter 11 bankruptcy protection. ICO-Teledesic Global is expected to become the umbrella company for New ICO and Teledesic. As a result of New ICO's just-completed reorganization plan, ICO-Teledesic Global is the controlling shareholder in London-based New ICO. 

ICO-Teledesic will roll out in 2 phases, beginning in early 2003, with ICO's already ordered satellites. During this first phase the ground system will be upgraded to allow the transmission of mobile voice and data at 144 kilobits per second. Phase 2 will begin in 2004 with the implementation of Teledesic's high-speed fixed wireless system, which will transmit computer traffic for large IP clients at 64 megabits per second. 

Building on the mobile voice capabilities of its existing system design, New ICO will offer a family of services that are the satellite equivalent of third-generation wireless services, including wireless Internet and other packet-data services. Teledesic representatives have been working closely with ICO and its industrial partners Hughes Space and Communications, Hughes Network Systems, NEC and Ericsson to upgrade the New ICO ground network. The improvements will enable New ICO to provide high-speed Internet services through its constellation of 10 medium-Earth-orbit satellites, plus two on-orbit spares. ICO's license to operate in the U.S. is still pending before the Federal Communications Commission. Though ICO has secured a license from the United Kingdom, it must still secure licenses and coordinate bandwidth around the world, as well as launch 12 satellites and redesign its gateways to upgrade its service. 

Teledesic had plans to develop a network of 288 LEO satellites to provide high-speed internet access throughout the world, but has since reduced that number to as low as 110. There has been some speculation that Teledesic is leaning toward a MEO system for its constellation, which is still three years from being launched. New ICO plans to start providing service in 2003, and Teledesic is maintaining its target service date of 2004. 

On May 3, the Amended Plans of Reorganization of ICO Global Communications (Holdings) Limited ("Old ICO"), a Bermuda corporation, and certain of its affiliates were collectively confirmed by the U.S. Bankruptcy Court for the District of Delaware and on May 17, the plans became effective. Based on the plans, the holders of the existing common shares of Old ICO will receive shares of common stock comprising approximately 1 percent of the common equity capitalization of New ICO Global Communications (Holdings) Limited, the reorganized company, and warrants to purchase such common stock. In addition, the plans provide for Old ICO to be liquidated under Bermuda law, and the common shares of Old ICO will eventually be canceled. While shares of Old ICO may remain outstanding until the liquidation is complete, the existing common shares of Old ICO no longer have any value other than the value of the shares and warrants being received under the reorganization plans. 

On May 12, Teledesic's board of directors approved the merger of Bellevue, Washington-based Teledesic into ICO-Teledesic Global, but the merger remains subject to shareholder and regulatory approvals. ICO-Teledesic Global Limited, a new holding company that controls the satellite assets of Craig McCaw's private investment company Eagle River Investments LLC, intends to propose to New ICO, a merger of the two companies. (Members of McCaw's Eagle River group include Deutsche Telekom, Quatar Telecom, Credit Suisse First Boston and Turk Telekom.) New ICO and Teledesic would become wholly owned subsidiaries of ICO-Teledesic Global. This proposal is subject to approval by the New ICO board and shareholders and regulatory authorities. McCaw would serve as chairman of ICO-Teledesic Global in addition to his role as chairman of New ICO and founder and chairman of Teledesic LLC. Russell Daggatt would become acting CEO of New ICO and ICO-Teledesic Global. Indian entrepreneur Subhash Chandra is among the investors in ICO-Teledesic Global.

Copyright 2001 - Andrews Space & Technology
Andrews Space & Technology Privacy Statement and Copyright Information

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