McCaw to buy Iridium assets in 11th Hour change of plan
$75m cash injection delayed -- Iridium only gets $5m for now
Iridium yesterday paved the way for Teledesic boss Craig McCaw to take over the company, when an earlier financing deal between the troubled satellite comms venture and McCaw's Eagle River Investments was torn up and a new procedure put in its place. Now, Iridium will receive a $5 million cash injection to keep it operational until 6 March, a little over two weeks away, from Eagle River and Motorola. That investment has been approved by the US bankruptcy court which has the last word on all Iridium's financial thanks to the company's Chapter 11 status. Soon after an new operating company will be formed to control the running of Iridium. That company will almost certainly be chaired by McCaw. By early March, the company will file a motion with the court under which Eagle River will propose to buy up Iridium's assets and provide the debtor-in-possession financing that McCaw's company was to have given now and last week filed with the bankruptcy court to do. "We are pleased by this new development. This approach should result in a more expeditious transition to a new operating company, which will benefit our customers," said Iridium CEO John Richardson. Of course, McCaw's takeover isn't a certain move, since under US bankruptcy law, Iridium has to be open to offers from other companies to bid for its assets. However, it's hard to see any other bidder emerging. The timing of the new deal comes so close on the heels of Japanese telco DDI's decision to cease funding Iridium and shut down the Nippon Iridium, the joint venture between DDI, Iridium and handset vendor Kyocera, that it's hard to conclude that the two events aren't related. ® Related Story MSN's next big heave -- broadband access by satellite
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