Eleventh Hour Bid Rescues Iridium

Eleventh Hour Bid Rescues Iridium

NEWINGTON, CT, Nov 17, 2000--The Iridium satellite telephone constellation won't be falling from the sky any time soon after all. The bid of businessman Dan Colussy to buy the bankrupt Iridium assets at the eleventh hour was approved November 15 by the US Bankruptcy Court for the Southern District of New York.

Earlier this year Motorola announced that it planned to start destroying the 66 satellites of the Iridium satellite telephone constellation and was putting together a timetable to bring down the failed system of low-Earth-orbiting satellites. Iridium's remaining subscribers were cut off in late August.

Other potential buyers abandoned plans to buy the Iridium assets. This past summer, potential suitor New York investment bank Castle Harlan was quoted as saying that the proposed business was too weak to save even at the bargain-basement purchase price of $50 million. An Iridium Satellite LLC statement did not indicate how much Colussy paid.

Colussy, an aviation industry figure, will purchase the operating assets of Iridium LLC and its subsidiaries. He's expected to refocus the satellite service on a more targeted, industrial clientele. Under the agreement, his new company, Iridium Satellite LLC, will purchase all of the existing assets of Iridium LLC, including the satellite constellation, the terrestrial network, Iridium real property and intellectual property owned by Iridium LLC. Colussy proposed the deal for Iridium a few weeks ago. He already has contracted with the Boeing Company to operate and maintain the constellation. Motorola has agreed to continue to provide subscriber equipment on commercially acceptable terms.

Iridium Satellite LLC will continue to provide commercial satellite communications to the U.S. government and plans to re-launch affordable satellite communications services to those industry segments that have a particular need for satellite communications--such as government, military, humanitarian, heavy industry, maritime, aviation, adventure--within 60 days.

Colussy previously served as chairman, president and CEO of UNC; chairman, president and CEO of Canadian Pacific Airlines and president and COO of Pan American World Airways.

While in operation, Iridium attracted only 55,000 subscribers. The company filed for bankruptcy last year.

--by ARRL from Iridium Satellite LLC statement and press reports

Member Comments: