LINCOLNSHIRE, Ill.-Motient Corp. announced it will up its stake in Mobile Satellite Ventures to 49 percent, just under what it needs to control the company. Motient’s stock was up more than 10 percent on the news to about $32.35 per share.
Motient said it closed a series of transactions with Telcom Satellite Ventures, Columbia Space Partners and Spectrum Space Equity Investors to trade its stock for 3.6 million units of Mobile Satellite Ventures.
Over the past few months Motient has managed to raise its stake in the company from 30 percent to almost 50 percent.
Motient was founded in 1988 as American Mobile Satellite Corp. and offered various satellite communications services to business users. In 1998, the company bought the Ardis wireless data network from Motorola Inc. for $100 million and shortly thereafter began offering wireless e-mail and other data services under the its new Motient name. In 2000, Motient and investment partners Columbia Capital, Spectrum Equity Investors and Telcom Ventures L.L.C. created a subsidiary called Motient Satellite Ventures L.L.C. to manage its satellite network. Motient Satellite Ventures later changed its name to Mobile Satellite Ventures. In 2001, Motient sold its satellite assets to MSV in return for a $15 million promissory note and a $2.5 million convertible note.
Now however, Motient appears to be reversing its course by buying back into its former business. The move comes shortly after the Federal Communications Commission gave MSV authorization to operate a land-based wireless system to supplement its satellite operations-the first such authorization of its kind. MSV promises that the new hybrid network will allow public-safety agencies and other entities to make satellite calls using standard mobile phones. MSV, which is a member of the CDMA Development Group, appears to be considering CDMA technology for its terrestrial component.
And MSV now appears to have the funds necessary to build its planned hybrid network. The company recently said it had raised $230 million in equity financing from Motient and other investors, including $145 million in new funding and the conversion or exchange of $85 million of senior debt and accrued interest.
Motient has been suffering under years of declining revenues and a dwindling customer base.
