Iridium will go silent in a week
If no one buys the company
Global satellite communications operator Iridium LLC may stop servicing subscribers around the world from 20.00 Moscow time on March 17. The main shareholder of Iridium LLC, Motorola, officially warned the company’s clients about this.

"Iridium LLC today has the cash to continue operations until March 17, 2000. But unless the company has a new 'qualified' buyer to provide additional financing by March 15, we do not believe Iridium service will be available after 11:59 a.m. ET ( 20.00 Moscow time. — Kommersant)". This is a quote from an "urgent warning" issued by Motorola late on March 6th. Let us recall that Motorola is the largest shareholder (it owns 18% of the company's shares) and the general contractor of Iridium LLC.
Iridium LLC's troubles began in August last year, when the company was unable to service loans worth $1.55 billion and began proceedings with creditors in US bankruptcy court. The litigation did not lead to anything good for the company. The assets of Iridium LLC (66 main and 6 backup satellites, two ground control centers and communication lines) are put up for public auction. On March 6, Judge Cornelius Blackshear announced that the bid deadline for the auction was March 15. If by this time no one wants to buy Iridium, the court will most likely decide to liquidate the company. Theoretically, a repeat auction could be scheduled. But this is unlikely. Iridium doesn't count on this. USA Today quoted an anonymous company representative as saying: "If there are no buyers willing to buy Iridium's assets by March 15, we will begin de-orbiting the satellites."
Not a single official application for participation in the auction has yet been received (although the most realistic contender for the purchase of Iridium LLC today is the American General Dynamics Corp.). It was precisely in case the applications never appeared that Motorola issued an “urgent warning.” It is noteworthy that following the “warning” text, Motorola provided a list of “alternative satellite operators.” Among them is GlobalStar, which is, in principle, Iridium’s main competitor. A unique case: the company, albeit indirectly, still advises to prefer the services of a competitor.
In Russia and the CIS countries, Iridium services are sold by the company Iridium Eurasia. Its general director, Elena Kuznetsova, told Kommersant yesterday: “We don’t know what we will do if the system stops working. We keep such a scenario in mind, but still consider it unlikely.”

IVAN Kommersant-CHEBERKO

Newspaper "Kommersant" No. 40 dated March 10, 2000, p. 6

Authors:

Ivan Cheberko