Chandra, McCaw tie up to revive ICO Global

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They were rival bidders earlier -- India's Subhash Chandra, and America's Craig McCaw. With their surprise announcement of 4 December 1999, they are now partners in an attempt to acquire global mobile satellite communications company ICO Global, for which they had made rival bids earlier. The target company is in the bankruptcy court, and will need an injection of an estimated $1.2 billion to be revived.

Mr Chandra's Zee group, which owns the largest Indian-owned cable TV network, will collaborate with Mr McCaw's Bellevue, Washington, based Teledesic to turn ICO Global around. The Wilmington, Delaware, court which has been trying the ICO Global bankruptcy case, has initiated the financial arrangement under which the two acquirers will come together to lead the revival plan. The court has given its approval for a $500-million revival package.

Mr McCaw will bring in 62 per cent of the funds required through lead financing, and Mr Chandra will provide the balance 38 per cent as equity to enable ICO Global to come out of its bankruptcy proceedings. The McCaw-Chandra alliance will receive 74 per cent of ICO's restructured equity. The balance 26 per cent will be distributed among the company's creditors and its current shareholders.

Mr Chandra is expected to route his funds for ICO through his Indian satellite company, Asian Satellite Communications, which itself is into an ambitious $140 million satellite programme of its own -- the Agrani project. He is understood to be raising his portion of the package worth $190 million through a consortium of India-based investors, including bankers, heads of financial institutions and fund managers.

Mr Chandra had earlier bid for 74 per cent of ICO Global's equity for $1.2 billion while Mr McCaw had bid for 80 per cent for the same amount. There were reports that Mr McCaw's offer would be accepted.