ICO Global Communications said its board has approved a bail-out plan under which international investors will provide as much as $US1.2 billion to help the financially troubled mobile communications company out of bankruptcy.
Under terms of the deal, Craig McCaw and his affiliated companies, Teledesic and Eagle River Investments, will take charge of a group of international investors that will provide $225 million in debtor-in-possession financing due for completion by November 8, and an additional $275 million in second-round help due by the end of January 2000.
Debtor-in-possession financing provides interim debt financing that converts into equity when a company emerges from bankruptcy, giving financially strapped companies stronger footing as they emerge from bankruptcy.
McCaw and his affiliate companies also have said they will underwrite ICO's remaining $700 million exit financing that is likely to be completed by the second quarter of next year when ICO completes its bankruptcy reorganisation, according to a written statement today from ICO, which filed for Chapter 11 protection in August this year.
The investment plan has to be approved by the US Bankruptcy Court and by courts in Bermuda and the Cayman Islands.
ICO formed in January 1995 to offer global mobile personal communications services via satellite. Teledesic, of which McCaw is chairman, is building a global broadband satellite communications network. McCaw and Microsoft Chairman and CEO Bill Gates are the company's two main founding investors.