Investors Led By Craig McCaw to Provide Financing for Iridium

Business Wire, Feb 9, 2000

Business Editors

WASHINGTON--(BUSINESS WIRE)--Feb. 9, 2000

A group of investors led by telecommunications pioneer Craig McCaw has agreed, subject to certain conditions, to provide $74.6 million in interim financing for Iridium LLC, which operates the world's first handheld global satellite communications system.

The debtor-in-possession (DIP) financing will enable Iridium to continue the company's operations beyond February 15, when terms will expire on a commitment of $20 million from current investors led by Motorola to fund operations from December 16, 1999, to February 15, 2000.

Iridium LLC today asked the U.S. Bankruptcy Court for the Southern District of New York to authorize the McCaw-led DIP financing for Iridium. The investment is the result of Iridium's efforts since its August 13, 1999, Chapter 11 filing to find an outside investor to fund a reorganization plan or to purchase the company's assets.

Under the plan submitted to the court today, the DIP financing would provide Iridium with the funds necessary to continue its operations and global service while an investor group led by McCaw completes due diligence on possibly purchasing the assets of the company and the company completes a reorganization plan. Subject to court approvals, this additional financing is intended to support Iridium's operations and restructuring activities until mid-year, when it expects to emerge from bankruptcy.

&uot;This interim financing is a critical step toward Iridium's successful restructuring and emergence from bankruptcy under the control of Craig McCaw,&uot; said John Richardson, Chief Executive Officer of Iridium LLC. &uot;Iridium continues to believe that personal satellite communications has a bright future, and we will continue to aggressively pursue our mission of delivering valuable communications services to customers around the world.&uot;

Iridium has not reached final agreement with McCaw or its creditors concerning a reorganization plan. However, based on its debt level in excess of $4 billion and the legal priorities in bankruptcy, the company continues to believe that any reorganization will not result in value remaining from the bankruptcy estate for current holders of its publicly traded equity or unsecured debt.

Iridium LLC became the world's first global satellite phone and paging company on November 1, 1998. Its network of 66-low earth orbiting satellites, combined with existing terrestrial cellular systems, enables customers to communicate around the globe. Iridium World Communications, Ltd. is the public investment vehicle of Iridium LLC.

Craig McCaw is chairman and chief executive officer of Eagle River, Inc., a company formed to make strategic investments in telecommunications ventures. He also is chairman of Teledesic LLC, which is building a global broadband Internet-in-the-Sky satellite communications network. He founded NEXTLINK Communications, Inc., one of the nation's fastest growing providers of competitive telecommunications services, and is a primary shareholder of Nextel Communications, Inc., a leading national wireless communications provider.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. This release contains statements about Iridium's expectations with respect to its future operations and restructuring. There are numerous factors that could affect Iridium's restructuring. Many of these factors are beyond Iridium's control.

Iridium is a registered trademark and service mark of Iridium IP LLC.