ICO-Teledesic Global has secured $1 billion in funding from investors, including Microsoft chairman Bill Gates, safeguarding the near-term future of the ICO and Teledesic satellite communication systems.
ICO-Teledesic Global is the holding company that controls the satellite assets of telecoms pioneer Craig McCaw, comprising his original wireless internet-in-the-sky Teledesic satellite system and New ICO, formerly ICO Global Communications, which McCaw rescued from Chapter 11 bankruptcy protection in May.
Secured investment includes an immediate $150 million from private equity firm Clayton, Dubilier & Rice (CD&R), with an option for $200 million, and $100 million from Gates' Cascade Investment. Gates was one of Teledesic's founding partners when McCaw launched the company in 1994.
Existing investors have committed to provide a further $42.5 million, while McCaw's Eagle River Investments has invested $500 million as part of a previously announced $1.2 billion restructuring of ICO.
The holding company is proceeding with plans to merge New ICO with Teledesic. The company needs $2.1 billion of additional financing to get New ICO operational in 2003, but expects the estimated $9 billion investment to begin Teledesic services in late 2004 "to come down considerably" because of the merger.
New ICO will offer global wireless internet and packet-data services, while Teledesic will offer broadband data and value-added services.
Source: Flight International