* ICO Satellite System
Troubled satellite telecom ICO Global Communications won a $1.2 billion
reprieve on Monday from investors led by industry veteran Craig McCaw.
McCaw is heading the investor intervention
that includes his companies Teledesic and Eagle River Investments; he
is the chairman of both firms.
Terms of the agreement, finalized Sunday,
name McCaw and his associates to provide $225 million in
debtor-in-possession financing, that is slated to be completed by Nov.
8. An additional $275 million in a second financing round is scheduled
for finalization by the end of January. The concern also will
underwrite an additional $700 million in exit financing that should be
completed by the second quarter of 2000.
ICO Global filed for bankruptcy protection in August after
falling short of funding in a bid to launch its satellite phone
service by the end of the year. Trading of company shares on Nasdaq
also were suspended. John Coates, an analyst at Salomon, Smith, Barney
who follows ICO Global, thought the bailout was positive for both ICO
and Teledesic. (Teledesic itself received a $121 million investment
Monday arranged by Abu Dhabi Investment Co.) "It's a great
match," Coates said. "It's a great vote of confidence that
underscores ICO's viability and the efficiency of their system."
He added: "It's also good for Teledesic
to take a stake in a satellite play. It gives them access several
years before they were scheduled to be in that area."
McCaw's Teledesic had plans in place to
launch its own satellite-based Internet service in tandem with
partners including Bill Gates and Boeing, though it has been
subject to delays and a broad scaling back of the satellite
infrastructure.
"It is our hope that by working with
ICO's team and international partners, we can bring the company back
to good health and make a contribution to global communications,
particularly in the developing world," McCaw said.
The funding will allow ICO to complete its
initial infrastructure ahead of a planned launch in the second quarter
of 2001. The company already had raised
$3.1 billion to fund the launch of 12 satellites.
Another satellite operator, Iridium, filed
for bankruptcy in August. The sector has met with a lukewarm response
from users because of expensive rates, bulky equipment and patchy
coverage.
ICO Satellite System
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