- Iridium, unable to find a qualified buyer to take on the company's debt and its constellation of 66 satellites, switched off its network over the weekend.
Iridium filed a document with the US Bankruptcy Court for the Southern District of New York ahead of a scheduled hearing on Friday, saying a buyer couldn't be found and that Motorola, Iridium's principal backer, would shut down the service, according to a report in the Wall Street Journal's Interactive Edition. The satellites would be left to burn up on re-entry into the Earth's atmosphere, the Journal said.
Iridium has been aggressively seeking a buyer since an investment group led by Eagle River Investments LLC decided against submitting a plan to buy the satellite company, which filed for bankruptcy protection in August of last year after defaulting on two loans.
Motorola and other investors put together additional loans to keep Iridium afloat while a buyer was sought, but that financing expired Feb. 15. Eagle River then stepped in with $US5 million in financing to maintain Iridium's operations through March 6.
When Eagle River, an investment management firm owned by Craig McCaw that has interests in several telecommunication firms, including Teledesic LLC, decided not to pursue acquiring Iridium, Eagle River said it planned to focus resources instead on developing satellite-based data services.
Iridium was granted a funding extension on March 6 to operate only through till Friday, according to a notice posted on the company's Web site.
Calls to Iridium and Motorola were not returned on Friday. Motorola informed customers who bought Iridium service directly from Motorola that the service will be shut down at 11:59 p.m., Eastern Standard Time, Friday.
The company had debts totaling about $4.4 billion when it filed for bankruptcy protection.