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 SCHAUMBURG, Ill., Aug. 2 /PRNewswire/ -- Motorola, Inc., (NYSE: MOT) today said that it has successfully obtained binding investor commitments and initial cash payments for financing of Iridium, Inc., closing the first-round equity offering of $800 million. Shares in Iridium, Inc. were purchased by telecommunications operators and industrial companies from around the world, with Motorola purchasing a minority interest in Iridium, Inc.
 Iridium, Inc. investors, in addition to Motorola, include the following companies or their affiliates:
 BCE Mobile, a subsidiary of BCE, Inc., the largest telecommunications provider in Canada; Muidiri Investments BVI, Ltd., a consortium of private investors based in Venezuela; Lockheed Corporation, the U.S. aerospace and industrial company; and Raytheon Company, the U.S. aerospace and electronics company; and Sprint Corporation, the only U.S. telecommunications company that provides long distance, cellular, and local telecommunications services.
 The Mawarid Group, a diversified Saudi Arabian industrial group; Khrunichev Enterprise, the Russian Federation's aerospace engineering and manufacturing organization and producer of the Proton launch vehicle; and STET -- Societa Finanziaria Telefonica per Azioni, the holding company for Italy's domestic and international telecommunications businesses, including wireline, cellular and satellite.
 Nippon Iridium Corporation, a consortium of 18 Japanese companies led by Daini Denden (DDI) and Kyocera Corporation, and including Sony, Mitsubishi Corporation, Mitsui Company, seven regional cellular operators, and others; China Great Wall Industry Corporation, one of China's largest industrial companies, which provides satellite launch services and manufactures the Long March launch vehicle; and United Communication Industry Company, Ltd., a major cellular and paging operator in Thailand.
 Iridium, Inc., will establish a global satellite communications system that will allow customers to call or be called anywhere on earth, anytime, using hand-held wireless telephones that communicate directly through a network of 66 low-earth-orbit satellites and gateway earth stations interconnected with the public telephone network. Iridium system services are expected to be operational in 1998.
 Many Iridium telephones are planned to be dual-mode, allowing subscribers to interconnect with terrestrial cellular networks, when available and compatible, and the constellation of satellites if cellular services are not accessible. In addition to high-quality voice services, Iridium telephones will be designed to transmit or receive wireless digital data, facsimile, paging and geolocation signals, bringing standard telecommunications capabilities to remote and unserved areas of the world, as well as urban environments.
 "The Iridium project heralds a new age in personal wireless communications," noted Motorola Chairman and Chief Executive Officer George Fisher. "We look forward to Motorola's active participation in the program."
 Motorola Vice Chairman John Mitchell said, "This is a milestone, allowing us to clearly see the beginning of a new class of global wireless communications before the 21st century. Once in service, we expect robust growth for this class of service, just as we found with the advent of paging and cellular services in the past."
 "We are pleased that such renowned telecommunications and industrial partners from around the world have invested in this new and exciting telecommunications venture," said Iridium Inc. Chairman and Chief Executive Officer Robert Kinzie. "In addition, many other telecommunications operators around the world have stated their interest in becoming Iridium service providers."
 Investors in Iridium, Inc. will enjoy numerous benefits, including any dividends paid by Iridium, Inc. A key attraction for investors is that all Iridium services will be administered through home gateways, to be owned and operated by those investors in their respective regions. Many of the investors also are expected to act as service providers, marketing products and providing services to Iridium users, often as a complement to their existing cellular or other telecommunications businesses.
 Iridium, Inc, said that it has signed a five-year $3.4 billion contract to purchase the Iridium space system from Motorola's Satellite Communications Division, a unit of the company's Government and Systems Technology Group, headquartered in Scottsdale, Ariz. The contract covers design, construction and launch of the satellite network and ground control system. Motorola said that it has executed significant subcontracts with a team of industrial suppliers.
 Iridium, Inc. also said it has signed a follow-up on $2.8 billion contract with Motorola's Satellite Communications division for operation and maintenance of the Iridium system over five years, beginning in approximately 1998.
 Motorola indicated that orders and revenues will be recorded for these contracts on a quarterly basis beginning in the third quarter of 1993. Their amounts will fluctuate, depending upon performance milestones in the contracts.
 Motorola's development expenses, payments to subcontractor and liabilities will increase rapidly as it moves ahead with implementation of the program. These costs should generally be offset by payments from Iridium, Inc. for Motorola's role as prime contractor.
 Other long-term business opportunities and benefits associated with the program for Motorola include any dividends from Iridium, Inc. and from its participation in the North American gateway, and potential revenues from sales of subscriber units and as a supplier of gateway earth stations and interconnect equipment.
 Motorola has made, directly or indirectly, approximately $270 million of the equity commitment, with the expectation that its ownership percentage will decrease over time to not less than 15 percent as additional investors join Iridium, Inc.
 Motorola, Inc. and Iridium, Inc. said that continued funding of investor commitments may be subject to obtaining certain clearances from the United States government, but added that such clearances are expected to be obtained over the next several months.
 Motorola is one of the world's leading providers of wireless communications, semiconductors and advanced electronic systems and services. Products include two-way radios, pagers, personal communications systems, cellular telephones and systems, defense and aerospace electronics, automotive and industrial electronics, computers, data communications and information processing and handling equipment. Sales in 1992 were $13.3 billion.
 -0- 8/2/93
 /CONTACT: Tim Kellogg of Motorola, Inc. 708-576-5301, or John Windolph of Iridium, Inc., 202-371-6889/
 (MOT) CO: Motorola, Inc.; Iridium, Inc. ST: Illinois IN: TLS SU: FNC

MP-TS -- NY017 -- 8241 08/02/93 09:44 EDT
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Publication:PR Newswire
Date:Aug 2, 1993

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