WASHINGTON-Iridium Inc. announced it has concluded a private financing within its existing investor group, raising an additional $315 million and boosting its total capital base from $1.6 billion to more than $1.9 billion.
The additional funds will be applied by Iridium Inc. to the ongoing construction of the Iridium system by a Motorola Inc. international team under a $3.4 billion space system contract in effect since July 1993, Iridium said. The Iridium system is scheduled to provide global wireless services to handheld telephones and pagers virtually anywhere in the world, starting in the third quarter 1998.
Iridium said the conclusion of the offering commits the funds that had previously been sought through a public high-yield debt offering. Iridium withdrew the offering because market conditions were unattractive.
Iridium said its board of directors has agreed to the sale of the company’s latest available Iridium gateway service territory that covers Australia, New Zealand and surrounding areas. The rights were secured by a group of investors comprised of Nippon Iridium Corp., a consortium of leading Japanese companies, Pacific Communications Co. Ltd., ROC and Vebacom GmbH, a joint venture between Germany’s Veba, AG and Cable & Wireless plc of the United Kingdom.
The investors will jointly develop and manage the service territory, providing Iridium gateway services and undertaking licensing, interconnection, marketing and distribution activities, Iridium said.
In a separate announcement, Motorola’s Advanced Messaging Systems Division said it will supply a minimum of 13 wireless message gateway terminals to be used in the Iridium system. The division will manage paging services, store and forward faxes and provide voice mail services for telephony and paging subscribers, Motorola said.
