Iridium: Motorola Demanding $24.7M for ‘Change of Control’
PARIS — Motorola is demanding $24.7 million in cash from mobile satellite services providerSatellite LLC and is threatening to deny Iridium access to Motorola-owned technology that is indispensable to Iridium as it designs a second-generation constellation of low-orbiting satellites, Iridium said Feb. 16.
In a filing with the U.S. Securities and Exchange Commission, Bethesda, Md.-based Iridium says Motorola, which was the original sponsor of Iridium, is asking the Circuit Court of Cook County, Ill., to rule that Iridium’s purchase last September by GHL Acquisition Corp. constituted a “change of control” under the terms of a December 2000 loan Motorola made to Iridium.
Iridium says Motorola is demanding “at least $24.680 million” under the loan agreement.
If the court agrees with Motorola that the GHL Acquisition meets the change-of-control definition in the loan agreement, then Motorola “would also have the right to terminate certain intellectual property licenses held by the company and its subsidiaries,” Iridium says. “These licenses cover substantially all the company’s system technology, including software and systems to operate and maintain its network as well as technical information for the design and manufacture of its devices.”
A long-fought battle with Motorola over the issue could complicate Iridium’s ongoing attempts to raise funds for its $2.7 billion second-generation satellite constellation of 66 operational satellites, called Iridium Next. Iridium has delayed the selection of an Iridium Next prime contractor as it seeks to finance the Iridium Next program and has told investors it now expects to make a decision no sooner than this summer.