ICO Global Communications Subsidiary Files for Bankruptcy
May 22, 2009
Last Friday DBSD North America, Inc. formerly known as ICO North America, Inc. and a subsidiary of ICO Global Communications, announced it filed a voluntary petition under Chapter 11 of the Bankruptcy Code in order to complete a restructuring of its $750 million of convertible notes due in August 2009. A majority of the holders of the notes agreed to accept shares of common stock of the reorganized company representing approximately 95 percent of the outstanding equity. ICO Global will receive shares representing approximately 5 percent of the outstanding equity.
DBSD said it anticipates it will continue to operate in a "business-as-usual" manner during the restructuring. ICO Global is not affected by the restructuring.
"After a careful evaluation of all of our alternatives, DBSD and the majority of our note holders agreed that a Chapter 11 filing is the best way to implement the restructuring of the Notes," said Michael Corkery, ICO Global and DBSD acting CEO. "DBSD and its subsidiaries have made tremendous progress in the past year to lay the foundation for delivering innovative mobile satellite services. This restructuring will allow us to significantly improve the financial position for DBSD and its subsidiaries, and will also allow DBSD to focus on maximizing the value of its capabilities and assets."
ICO Global and TerreStar are the two mobile satellite service (MSS) licensees authorized to use frequencies previously allocated for 2 GHz broadcast auxiliary services. While Sprint has taken the lead in relocating broadcasters' 2 GHz microwaves to the new band plan, under FCC rules, ICO Global and TerreStar share some of the responsibility for the relocation. ICO plans to use its 20 MHz of 2 GHz spectrum to provide an MSS/ancillary terrestrial component (ATC) system providing data and voice services to all 50 U.S. states as well as Puerto Rico and the U.S. Virgin Islands.