RESTON, Va.—Wireless data network operator Motient Corp. pulled off what could be considered a magic trick, considering the current economic situation and the dire troubles faced by other wireless data companies. The carrier will emerge from Chapter 11 bankruptcy without the aid of an acquirer or an investor.
“We are extremely pleased to be emerging from these proceedings so quickly,” said Walter Purnell, Motient’s president and chief executive officer. “The support we have received from our bondholders has allowed us to move through this process with relative ease.”
Purnell added: “I would like to extend our deepest appreciation to our customers and business partners for their loyalty during this process. I would also like to extend my personal thanks to all of our employees who have worked so diligently during these past months.”
Motient filed for bankruptcy in January, a move that was not unexpected. Wireless data software and service providers have been suffering during the past year, and many of the independent paging and messaging carriers will be in Chapter 11 bankruptcy by the end of this month. Motient’s ailing finances even caused BlackBerry maker Research In Motion Ltd. to cut the carrier out of its future revenue projections. Some BlackBerry devices run over Motient’s network, and Motient relies heavily on BlackBerry sales for its revenues.
RIM executives weren’t immediately available for comment on Motient’s emergence from bankruptcy.
Under Motient’s previously announced plan, the carrier’s bondholders will exchange their $335 million in senior notes for 25 million undiluted shares of Motient’s new common stock, which accounts for 97 percent of the company. Current Motient stockholders will receive warrants for 5 percent of diluted new common stock. The U.S. Bankruptcy Court for the Eastern District of Virginia confirmed the plan, and it is expected to be effective May 1.
