McCaw Bows Out of Iridium Investment
Eagle River Investments, US telecommunications pioneer Craig McCaw's investment management firm, announced last week that it will no longer pursue an investment in Iridium, the satellite constellation offering narrowband global voice and paging services. Eagle River instead will focus its satellite communications investments on data-centric companies, such as ICO Global Communications and Teledesic, according to a statement from McCaw's office.
"With the powerful influence of the Internet on global communications, we've made a strategic decision to focus our resources and attention on the satellite-based data services that ICO and Teledesic can provide," said Dennis Weibling, president of Eagle River. "After careful examination of Iridium's technologies, we determined that there are closer synergies between ICO and Teledesic and the services they will provide customers worldwide."
London-based ICO is building a global, mobile Internet Protocol-based voice and data service. Teledesic will deliver broadband data and value-added services at significantly higher data rates over a global network also optimized for IP. Iridium, which launched service in 1998, offers global voice and paging services through its constellation of 66 low-Earth-orbit satellites.
In recent months, Teledesic has been working to support Craig McCaw's plans to acquire the assets of ICO. ICO, which is expected to go into service in 2002, sought Chapter 11 bankruptcy protection last August shortly after Iridium also filed for bankruptcy protection.
In October 1999, McCaw's investment management company agreed to lead a group of investors that will provide up to $1.2 billion to ICO to enable the company to emerge from bankruptcy. On Feb. 4, Eagle River completed a definitive agreement to proceed and initiated a $275 million second round investment in ICO.
On Feb. 17 in separate proceedings, the U.S. Bankruptcy Court for the Southern District of New York approved $5 million in interim financing for Iridium from Eagle River and Motorola to finance Iridium's operations through March 6. Eagle River this week completed its due diligence on Iridium LLC.
McCaw is the chairman and CEO of Eagle River Investments, through which he holds his interests in Teledesic, ICO Global Communications, NEXTLINK Communications and Nextel Communications. McCaw also is Teledesic's chairman and co-CEO. He and Microsoft founder Bill Gates are the company's two primary founding investors.
Teledesic is the first licensed satellite communications network that will enable affordable, worldwide access to advanced telecommunications services such as computer networking, broadband Internet access and interactive multimedia.
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