Iridium LLC, the ailing satellite telephone pioneer, announced yesterday that it had defaulted on an $800 million loan from Chase Manhattan Corp. and a $750 million bank loan guaranteed by Motorola Inc.
The Chase loan had already been extended, and the bank last week declared the $800 million loan to be in technical default.
The move was not unexpected, and the company continued to engage in intense negotiations with creditors. Analysts are closely watching a second crucial deadline approaching on Sunday, when a $90 million payment on $1.45 billion in bonds comes due.
In a brief news release, Iridium said that it is "continuing to consider options for restructuring its capital structure."
A company spokeswoman declined to comment further.
Motorola, which owns 18 percent of Iridium, the largest stake, had a one-sentence comment on the day's news. "Regardless of today's expiration of the bank's extension, we'll encourage all of the relevant parties to continue negotiations in an effort to agree upon a plan to restructure Iridium's debt," said spokesman Scott Wyman.
Shares of Iridium World Communications Ltd., the company's public investment entity, fell 37 1/2 cents yesterday, to $5.93 3/4.