Iridium Announces Comprehensive Plan For Next Gen Constellation
McLean VA (SPX) Jun 03, 2010
Iridium Communications has announced its comprehensive plan for funding, building and deploying its next-generation satellite constellation, Iridium NEXT.
Specifically, the Company announced the execution of a fixed price contract with Thales Alenia Space, a joint company between Thales (67%) and Finmeccanica (33%), for the design and construction of satellites for the Iridium NEXT constellation.
In addition, the company announced that Coface, the French export credit agency, has issued, for the account of the French State, a "Promise of Guarantee" which commits to cover 95% of the $1.8 billion credit facility for the project.
The financing to be covered by the Coface guarantee is being syndicated through French and other major international banks and financial institutions and is expected to be completed this summer.
The Coface guarantee commitment is not conditioned on Iridium raising any further debt or equity financing. Goldman, Sachs and Co., Societe Generale, and Hawkpoint Partners Limited continue to advise the Company in connection with the financing.
Iridium's fixed price contract with Thales Alenia Space provides for the construction of the originally planned 72 operational satellites and in-orbit spares, plus an additional nine ground spares, which provide greater risk mitigation with respect to the new constellation. As a result of the expanded scope of the project, the total cost of Iridium NEXT, including all costs associated with development, manufacture and launch of the constellation, is now anticipated to be approximately $2.9 billion.
In addition, Iridium has entered into an Authorization to Proceed (ATP), which allows Thales Alenia Space to commence work immediately on the development of satellites prior to completion of the financing, with the plan to commence the launch of the first satellites during the first quarter of 2015.
"Our announcement exceeds our earlier expectations in every way," said Matt Desch, CEO of Iridium.
"We are very pleased with the completion of our comprehensive vendor selection process. We have a great partner in Thales Alenia Space, a world leader in satellite systems, who has developed a sophisticated satellite constellation that will allow us to seamlessly transition to an even more powerful network in the future. In addition, the Coface guarantee enables Iridium to secure attractive and flexible low cost financing for the project. Based on the amount of this guarantee, we expect Iridium NEXT to be fully funded when the financing is finalized this summer. This is a critical step in maintaining our customers' and partners' confidence that Iridium will keep delivering innovative products and services globally through the coming decades."
"We are excited to be Iridium's lead supplier in the design and build-out of the Iridium NEXT constellation," said Reynald Seznec, CEO of Thales Alenia Space.
"With our satellite design, Iridium will have a flexible platform for the delivery of existing and new services. As the prime contractor for Iridium NEXT, Thales Alenia Space is the undisputed leader in the design and manufacture of commercial LEO satellite communications systems. We will be supported by a broad consortium of world-class technical partners with extensive expertise in supporting critical missions of this scale and nature, and we expect 40 percent of the work for Iridium NEXT to be subcontracted to North America companies."
In conclusion, Desch noted, "This marks a great milestone in Iridium's history. We operate the world's only communications system that truly works everywhere in the world, with more than 359,000 subscribers. By entering into the ATP to immediately begin building a complete next generation satellite system, and by securing export credit agency support of an amount sufficient to enable us to fully fund the project, we have completed critical steps in laying a strong foundation for Iridium's future. Going forward we can focus all our energies on continuing to add new subscribers and working with our partners to deliver new products to serve our diverse subscriber base."
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