Motorola Offers 2nd Iridium Plan

Motorola Inc., the largest investor in cash-strapped Iridium, has proposed a second restructuring plan for the global satellite-telephone company that is closer to what Iridium bondholders are seeking, investors familiar with the negotiations said.

Motorola’s latest proposal calls for bondholders to swap two-thirds of their securities for new debt convertible into common stock that represents an equity stake of about 44%.

Motorola, which owns 18% of Iridium and has promised it financial guarantees of $2.2 billion, would have a 25% stake in return for guaranteeing another $400 million in cash to ease Iridium’s lack of liquidity. The rest would be owned by investors and shareholders of Iridium World Communications Ltd., the publicly traded arm of Iridium. Their stake in the company would be diluted to about 4% from 14%.

Iridium World shares rose 16 cents to close at $6.13 on Nasdaq. Motorola shares rose 75 cents to close at $88.75 on the New York Stock Exchange.