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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported:) August 17, 1999
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Iridium LLC
Delaware 0-22637-01 52-1984342
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Operating LLC
Delaware 0-22637-02 52-2066319
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium World Communications Ltd.
Bermuda 0-22637 52-2025291
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
(441) 295-5950
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Iridium Capital Corporation
Delaware 333-31741-03 52-2048739
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium IP LLC
Delaware 333-31741-01 52-2048736
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Roaming LLC
Delaware 333-31741-02 52-2048734
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Facilities Corporation
Delaware 33-44349-04 52-2083969
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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This current report on Form 8-K is filed jointly by Iridium LLC (the
"Parent"), Iridium Operating LLC ("Operating"), Iridium World Communications
Ltd. ("IWCL"), Iridium Capital Corporation ("Capital"), Iridium Roaming LLC
("Roaming"), Iridium IP LLC ("IP") and Iridium Facilities Corporation
("Facilities").
IWCL acts as a member of the Parent and has no other business.
Operating is a wholly owned subsidiary of the Parent. The business of Operating,
operating the Iridium system and offering Iridium services, constitutes
substantially all of the business of the Parent. Capital, Roaming, IP and
Facilities are wholly owned subsidiaries of Operating.
Item 5. Other Events
On August 13, 1999, Parent, Operating, IWCL and Capital filed a voluntary
petition for reorganization under Chapter 11 of the Federal Bankruptcy Code in
Federal District Court in Delaware. Also, on August 13, 1999, an earlier
purported involuntary petition for reorganization under Chapter 11 was filed in
respect of Iridium Operating LLC and Iridium Capital Corporation in Federal
District Court in the Southern District of New York by three holders of bonds
issued by Operating and Capital and members of the Bondholder Committee
described below. On August 16, 1999, the United States Bankruptcy Court for the
Southern District of New York, with the consent of the parties, issued an order
permitting Iridium to operate its business in the ordinary course pending a
determination as to which venue is appropriate.
During the period prior to the filings of the bankruptcy petitions,
Iridium engaged in negotiations regarding a potential restructuring of Iridium's
capital structure which included Iridium and various constituencies of its
creditors and its equity holders. One of the parties to these negotiations was a
group of holders of bonds issued by Operating and Capital (the "Bondholder
Committee"). In connection with these negotiations, Iridium agreed with the
Bondholder Committee that by August 15, 1999 it would disclose publicly certain
confidential information of Iridium provided by Iridium to the Bondholder
Committee during the course of negotiations. Iridium is making the following
public disclosure pursuant to that agreement.
Projected Capital Expenditures, Operating Expenditures and Revenues. In
early July 1999, Iridium projected that it would have:
(i) cumulative accrued revenues of approximately $35 million, $431
million, $1,004 million and $1,371 million for the six months
ended December 31, 1999 and the years ended December 31, 2000,
2001 and 2002;
(ii) consolidated operating expenses of approximately $437 million,
$622 million, $612 million and $611 million for the six months
ended December 31, 1999 and the years ended December 31, 2000,
2001 and 2002; and
(iii) consolidated capital expenditures of approximately $151 million,
$286 million, $285 million and $285 million for the six months
ended December 31, 1999 and the years ended December 31, 2000,
2001 and 2002.
The foregoing projections should not be relied upon. Iridium believes they are
no longer accurate and actual results are likely to be materially different from
the results expressed or implied by such projections. The foregoing projections
(i) have not been updated to reflect events since early July 1999 and (ii) when
made, were based on various assumptions about future events that have not been
realized or are now less likely to be accurate, including that Iridium, its
creditors and its equity holders would reach consensus on a restructuring of
Iridium's capital structure prior to mid-August 1999.
Restructuring Proposals. The negotiations regarding the potential
restructuring of Iridium's capital structure that Iridium engaged in prior to
the filings of the bankruptcy petitions generally focused on the following
constituencies: (i) the lenders under Iridium's $800 million secured credit
facility; (ii) the lenders under Iridium's $750 million guaranteed credit
facility; (iii) holders of the approximately $1.45 billion of bonds issued by
Operating and Capital; (iv) holders of other debt obligations of Operating and
Capital; (v) strategic equity investors in Iridium; (vi) IWCL; and (vii)
Motorola, Inc. ("Motorola") as principal vendor for the operation of the IRIDIUM
System.
During these negotiations, the various parties made several formal
proposals to each other. In general, these proposals provided the proposing
party's view of what securities and rights the various constituencies of
Iridium's creditors and its equity holders would have after a restructuring of
Iridium's capital structure had occurred.
Iridium made several formal proposals, including proposals negotiated in
sequence - negotiations with one party that resulted in changes to the proposal
prior to presentation to one or more other constituencies. Iridium's latest
proposal, as negotiated with and conditionally agreed to by Motorola, was
presented to the Bondholder Committee late in the week of August 9, 1999 for the
purpose of seeking agreement in principle from the Bondholder Committee. Such an
agreement could not be reached prior to the filings of the bankruptcy petitions.
In addition, the latest proposal was not formally presented to or approved or
disapproved by other constituencies, including the lenders under Iridium's
credit agreements and Iridium's strategic investors. Accordingly, Iridium
expects that the details of any agreement among the constituencies, including
new investment amounts and post-restructuring equity holdings of the various
constituencies, could differ substantially from the latest proposal.
The salient features of the structure of the latest proposal generally
were that: (i) the lenders under Iridium's credit facilities would extend the
maturity of, and modify the business covenants included in, those facilities;
(ii) the holders of approximately $1.45 billion of bonds and other debt
obligations of Iridium and Operating, including outstanding unsecured
obligations to Motorola, would convert all or a substantial portion of their
holdings to an equity position which would represent, in the case of the
holders of the bonds, approximately one-third of the equity interests in
Iridium and, in the case of the holders of other debt obligations,
approximately 12% of such equity interests; (iii) some of Iridium's current
strategic investors and/or other parties would make substantial new equity
investments in Iridium, estimated at approximately $500 million; (iv) Motorola,
as principal vendor for the operation of the IRIDIUM System, would grant
Iridium significant deferrals of substantial amounts scheduled to be due under
the contracts for the operation of the IRIDIUM System; and (v) the equity
investors that do not make new equity investments in Iridium would accept
substantial dilution of their interests in Iridium.
Future Restructuring Negotiations; Failure to Reach Agreement. Iridium
expects that negotiations among the various constituencies will continue in
connection with the bankruptcy proceeding. Iridium can provide no assurance that
these negotiations will result in a consensual restructuring or that the
interests of various constituencies, including those of current holders of
equity in Iridium, will not be reduced further or eliminated as a result of the
bankruptcy proceedings.
Forward Looking Statements. This report contains forward looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. These statements include statements about Iridium's expected revenues,
costs and expenditures, Iridium's expectations about future proposals regarding
the restructuring of its capital structure and Iridium's expectations about the
outcome of negotiations and court proceedings regarding the restructuring of its
capital structure. Actual results are likely to differ and may differ materially
from the results expressed or implied by these statements. There are numerous
factors that could cause such differences to occur. Such factors include, but
are not limited to, the effect of the operating results of Iridium on
negotiations and related matters, the actions of third parties, including
Motorola and Iridium's other strategic investors and vendors, the actions of
Iridium's creditors and market perception regarding Iridium's prospects. Many of
these factors are beyond Iridium's control. For further discussion of some of
the factors that could cause actual results to differ, consult Iridium's other
filings with the Securities and Exchange Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, each registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
IRIDIUM WORLD COMMUNICATIONS LTD.
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM LLC
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM OPERATING LLC
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM CAPITAL CORPORATION
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM IP LLC
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: acting secretary
IRIDIUM ROAMING LLC
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: acting secretary
IRIDIUM FACILITIES CORPORATION
By /s/ F. THOMAS TUTTLE
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Name: F. Thomas Tuttle
Title: Secretary
Date: August 17, 1999
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