[Satellite News 03-18-11] Iridium
’s transformation over the last few years from a voice service company on the verge of bankruptcy to a diversified, well-funded and high-potential MSS entity has given industry analysts and investors more than a fair share of pleasant surprises.
When the company first announced its next-generation Iridium Next constellation, it was criticized as unrealistic and overambitious. Now that the company has secured a $1.8 billion ECA credit facility from Coface
at a 4.6 percent interest rate and reported double-digit subscriber and service revenue increases over the past year, Iridium Next has become the operator’s bridge to long-term success in a plethora of new markets.
At the helm of these efforts is CEO Matt Desch, who gave Satellite News
a behind-the-scenes look at Iridium Next’s development as well as a sneak peak into the operator’s future business model.
Satellite News: What were the circumstances that allowed you to secure such a low interest rate on your Coface financing?
We presented a viable financial situation for investors. We started the process in late 2009 by going public, which paid off our debt. At the time we were looking for financing, we were debt free and had a 10-year long track record of rapid growth. In a reasonable market, we would have been able to get normal financing, but 2009 and 2010 weren’t normal years. I will say that some luck was involved in the fact that global credit agencies were more attuned to support their industries and jobs during a recession and that we were able to take advantage of that enthusiasm and the market trends. It wasn’t luck that allowed us to get financing, but we were lucky with the rates and the terms that we got with the Coface deal. We would have been able to raise cash on our performance over a long period of time, but it was much better for us to have it all done at once at terms we would not have received commercially.
We also had good timing with the finance deal. Once we recognized the opportunity and we were right in the middle of selecting our satellite suppliers, we created a competitive environment by going to our financiers directly. Thales, in particular, did a great job of helping us secure the financing facility and create a competitive environment. It was a lot of work on everyone’s behalf between October 2009 and October 2010 and it really paid off. We’re building Iridium Next.