NEW YORK-Orbcomm Corp. of Herndon, Va., filed for a public offering to raise capital to repay Orbcomm Global L.P., which has financed the start-up low-earth-orbit satellite data communications venture so far. Orbcomm Corp. was incorporated in March.
Bear, Stearns & Co. Inc. and J.P. Morgan & Co., both based in New York, will serve jointly as lead underwriters for the proposed offering of $125 million in common stock. The company has applied for listing on the Nasdaq National Market.
Orbcomm said it believes proceeds of the initial public offering, an outstanding debt issue and earlier financial contributions by members of the limited partnership will provide the approximate $332 million it anticipates needing through third quarter 1999. By the end of last year, some $242 million of that amount had been spent.
The $332 million will pay for a system of 36 LEO satellites and associated ground infrastructure, the company said in its IPO registration filing with the Securities and Exchange Commission. Orbcomm has provided limited commercial service in the United States since early 1996. As of April 21, Orbcomm had launched a total of 12 satellites and anticipated launching 16 more by mid-year.
“This will complete a planned 28-satellite constellation, at which time [the company] expects to be able to expand significantly its services in the United States and other temperate regions,” the registration filing said. “An additional eight satellites for an enhanced constellation and better service in equatorial regions are expected in the third quarter of 1999.”
The money raised by the initial stock sale will be paid to Orbcomm Global L.P., but the stock issued won’t constitute any ownership interest in the partnership.
Partnership members, comprising corporate entities affiliated with Orbitel Science Corp., had invested $180 million in Orbcomm Global L.P. as of Dec. 31. The partnership members are Orbitel Communications Corp., an American space and information systems manufacturer and service provider; Teleglobe Inc., a North American-based international telecommunications carrier; and Teleglobe’s strategic partner, Technology Resources Industries Bhd., a Malaysian holding company that controls the largest cellular operator in Malaysia and has established cellular operations in Bangladesh, Cambodia and Tanzania.
The newly incorporated Orbcomm Corp. will become general partner of Orbcomm Global L.P. after the initial public equities sale. The preliminary prospectus leaves unanswered what percentage of Orbcomm Global will then be controlled by Orbcomm Corp. and the various Orbitel Science affiliates.
However, the registration document further said that after the stock sale, Orbitel and Teleglobe each will contribute their existing 2-percent interests in two other Orbcomm limited partnerships. Orbcomm USA L.P. and Orbcomm International Partners L.P., formed solely to market Orbcomm services, then will be dissolved.
