UPDATE 1-Iridium selects Thales Alenia to build satellites

Wed Jun 2, 2010 10:21am EDT

* French export agency backs financing

* Shares up 7 pct

ATLANTA, June 2 (Reuters) - Mobile satellite service provider Iridium Communications Inc (IRDM.O) on Wednesday said it chose Thales Alenia Space over Lockheed Martin Corp (LMT.N) to design its next generation of satellites and announced a financing plan for the project, sending its shares up 7 percent.

The company said the fixed-price contract with Thales Alenia, a joint venture between France's Thales (TCFP.PA) and Italy's Finmeccanica (SIFI.MI), includes 72 operational satellites and an additional nine ground spares.

The cost of the project, which will enable higher data speeds and other enhanced products and services, is about $2.9 billion.

The company said that Coface, the French export credit agency, has committed to guarantee 95 percent of the $1.8 billion credit facility for the project. That funding, which is being syndicated through French and other major international banks and institutions, is expected to be completed this summer and is not contingent on Iridium raising further debt or equity financing.

"We believe we will have all the money we need to finance NEXT with this credit facility," Iridium Chief Executive Matt Desch said during a conference call.

The Coface guarantee allows Iridium to obtain the credit facility under favorable terms, Iridium said.

Thales Alenia Space said it expects 40 percent of the work for the project, which is called Iridium NEXT, to be subcontracted to North American companies including Ball Aerospace (BLL.N) and Boeing Co (BA.N).

Iridium said Thales Alenia can begin work immediately on the satellite development and plans call for the first satellites to be launched during the 2015 first quarter.

Shares of Iridium were up 61 cents to $9.33 in morning Nasdaq trading.

(Reporting by Karen Jacobs, editing by Dave Zimmerman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.