ORBCOMM SELLS ASSETS TO CAL. COMPANY
Advanced Communications Technologies (ACT) of Irvine, Cal. received approval of U.S. Bankruptcy Court, Wilmington, Del., Fri. to buy assets of bankrupt Orbcomm for $16 million, court said. Sale is scheduled to close Fri. Orbcomm CEO Scott Webster said deal allows company to be “unencumbered by debts” while improving balance sheets that forced it to seek bankruptcy protection in Sept. He said Orbcomm would continue to provide service and ACT would “enhance and leverage” company position in marketplace. It announced last Feb. it would auction assets. EchoStar, Final Analysis, Qualcomm and global group of Orbcomm licensees and company’s Japanese service provider made unsuccessful bids for assets of Orbcomm. Final Analysis spokeswoman said bid was made because company planned to introduce satellite message system next year. EchoStar and Qualcomm refused comment.
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Orbcomm admitted some investors wouldn’t be repaid. Neither court documents nor Webster indicated how money from sale would be distributed to long list of creditors. As of Sept., top 20 creditors were owed some $181 million ranging from $924,000 for State St. Bank & Trust, N. Quincy, Mass., to $27.2 million for Morgan Stanley Dean Witter. Others included J&W Seligman ($27 million), Oppenheimer Funds ($24 million), Bear, Stearns Security Corp. ($18.5 million), Dreyfus Corp. ($14 million), Chase Bank of Houston ($12.9 million), and Cypress Capital for L.A. Police and Fire Retirement Fund ($8.8 million). Orbcomm spokesman said official statement wouldn’t be issued until transaction was completed.
ACT spokesman said company planned to reorganize operation, improve service network, sales and marketing effort. Plans call for Webster to be retained in senior management position. There are also no plans to move operations, and ACT said it hoped to keep Orbital as strategic partner. Orbcomm plans to buy replacement satellites from Orbital Sciences with launches scheduled for 2003 and 2007 aboard Orbital-built Pegasus rockets, industry source said. Orbital spokesman said he couldn’t comment on future relationship with Orbcomm until sale closed. Another Orbcomm partner, Teleglobe, was said to be moving ahead with plan to sell stake in Orbcomm.