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As Motorola Plans Deorbit Of Iridium Last Minute Buyer Surfaces

More Information:

Motorola Inc. is finalizing a schedule to destroy the Iridium satellite constellation. The U.S. Bankruptcy Court for the Southern District of New York hearing set for August 23 to discuss bids for Iridium LLC was canceled because no qualified buyers emerged. Scott Wyman, Motorola, said, "We're putting together a final schedule to decommission the (satellite) constellation. It's costing us several millions of dollars per month to maintain the network." Some news stories incorrectly reported that deorbiting would begin August 24-25. Motorola corrected those reports saying, “it will be after that," without discussing a possible timeframe. The decommission schedule has not yet been completed. There is no target date to start de-orbiting the satellite network.  

According to a court filing submitted August 25, a California-based organization named CMC International is offering to pay US$30 million to acquire Iridium's 88 satellites and other assets. It is not clear whether this bid is being seriously considered by either Iridium or Motorola. The CMC bid was "revised in response to developments in these proceedings and (Iridium's) request." The next court hearing in the case was scheduled for August 28. Anyone can submit a bid to the New York bankruptcy court handling the Iridium case. Dozens of parties have expressed interest in bailing out Iridum since the company filed for Chapter 11 bankruptcy protection, but only two overtures have progressed far enough to be acknowledged publicly by Motorola. In recent weeks, there have been "official" bids for as little as US$5 million and even nothing but a pledge to repay debtors over 20 years. Iridium has reviewed each of the bids and has made requests that Motorola hold discussions with some of the parties. Iridium has sent a letter to Motorola complaining that Motorola has hindered efforts by making unreasonable demands during "active negotiations with third parties who have made offers to purchase the constellation of satellites." Motorola says it is not holding talks with any parties at this time and is proceeding with plans to decommission the satellite constellation.

Motorola has advised Iridium phone owners that it would be shutting down a gateway that allows Iridium phone users to call and receive calls from non-Iridium phones. The gateway was scheduled to close at 0000 UTC August 25. Motorola announced, “Service availability will be limited to Iridium unit to Iridium unit calling, and possibly some limited service on calls processed by another Gateway that still has an active PSTN [public switched telephone network] interconnect.” Motorola further warned, “Please be aware that any and all remaining Iridium service could end at any time -- without any advance notice.” Motorola had stated in March that it could take up to nine months to develop software to fire the thrusters for the initial orbit-lowering maneuver, and up to two years until all the satellites have been deorbited. The total cost of the deorbiting maneuver is expected to be between US$30 and US$50 million, most likely to be paid by Motorola.
  


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August 28, 2000

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