ORBCOMM AUCTION CLOSES WED.; WINNER WILL BE ANNOUNCED FRI.
Orbcomm will be in hands of new owner after company completes auction this week, CEO Scott Webster said. Auction for Orbital Sciences subsidiary closes Wed., with winning bidder to be announced by U.S. Bankruptcy Court, Wilmington, Del., Fri. Webster said Orbcomm would be in improved financial position once auction was complete because it would be free of debt. “We're now in a difficult situation, but I'm optimistic we'll emerge leaner and unencumbered,” Webster said. New owners will “acquire a business that’s running smoothly,” he said. Orbcomm expects new owner to reach settlements with creditors as part of purchase agreement, official said. Orbcomm had sought bankruptcy protection in Sept. and on Feb. 8 announced plans to conduct auction through bankruptcy court.
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Included in sale are all major assets, including 30 LEO satellites, ground systems and undisclosed number of customers who buy messaging and data service. Orbcomm has been unable to satisfy obligations on $170 million in debt and has been struggling to convert orders into much-needed cash, industry source said. No potential buyers have been identified, but Webster said current stakeholders, including parent Orbital Sciences and Teleglobe, wouldn’t play role in new company.
“We have the hope that we will have multiple bidders,” Webster said. Officials of Orbital Sciences and BCE, new owner of Teleglobe, agreed that probably would be case. “It depends on the circumstance of sale,” Orbital Sciences spokesman said. BCE spokesman said Teleglobe considered undisclosed investment in Orbcomm as “discontinued operation.” Webster conceded auction sale meant some Orbcomm investors wouldn’t be paid, but said he planned to “do as much as possible to see that creditors get as much as they can.” Satellite analyst said that was time for Orbcomm creditors to be understanding. “People have learned from Iridium,” he said: “If you play hardball with a company that owns unique assets, you may end up with nothing.”