A step closer to insolvency

Published: 14 August 1999 y., Saturday
Iridium World Communications LLC said it had defaulted on loans totaling more than $1.5 billion, pushing the struggling operator of a $5 billion global satellite telecommunications network another step closer to insolvency. THE DEFAULTS - on an $800 million loan and another $750 million loan - occurred after Iridium failed to meet customer and revenue growth targets required under the $800 million loan. Its third extension on the $800 million senior secured loan expired Wednesday, triggering the subsequent default on the other loan, Iridium spokeswoman Michelle Lyle said. Iridium did not ask for another extension, she added.The default, which has the potential to lead Iridium down the path to bankruptcy, also could hurt telecommunications equipment supplier Motorola Inc., Iridium_s original backer, a key shareholder and one of its loan guarantors.Motorola holds about 18 percent of Iridium equity, Motorola spokesman Scott Wyman said. The Schaumburg, Ill.-based company is the guarantor of the $750 million loan in default. The other $800 million loan is secured by another party, he said.
Šaltinis: MSNBC
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