Emma Kelly/LONDON
Teledesic chairman Craig McCaw is leading a rescue package for ICO Global Communications. It is designed to provide the bankrupt mobile satellite communications company with $1.2 billion so that it can launch services in 2001.
McCaw and his affiliated companies, Teledesic and Eagle River Investments, will lead a group of existing ICO investors to provide an initial $225 million of debtor-in-possession financing to ICO. This investment, which was expected to be completed by 8 November, is interim debt financing that will be converted into equity when ICO emerges from bankruptcy.
The satellite system start-up entered Chapter 11 bankruptcy protection in August, following its failure to raise an extra $1.6 billion to allow it to launch services.
After "aggressively reducing costs", ICO says it needs $1.2 billion to complete building its satellite system and to provide working capital up to service launch in the 2001 second quarter.
A second financing round, which is expected to be completed in January, will provide ICO with an additional $275 million.
McCaw and his affiliates have also agreed to underwrite the remaining $700 million in exit financing, which is expected to be completed by the second quarter of next year, when ICO's reorganisation plan is implemented.
Existing and additional investors will be required to participate in the exit financing, but mobile satellite system operator Inmarsat has announced it will not make any further investment in spin-off ICO.
"This financing agreement provides us with a clear path to exit from Chapter 11," says Richard Greco, ICO's chief executive.
Teledesic, investors in which include Bill Gates, head of computer software company Microsoft, and Motorola, is developing a global broadband Internet-in-the-sky satellite communications network. Teledesic has previously been linked with Motorola-led ICO competitor Iridium, which is also in Chapter 11 bankruptcy protection (Flight International, 27 October-2 November).
Source: Flight International
