Lost In The Noise

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Hidden in the roar of bailouts, Congress and rising sea levels, GHL Acquisition Corp., a Greenhill & Co. affiliate, quietly agreed to acquire satellite phone provider Iridium Holdings LLC.
Motorola and a slew of greater fools had dumped $5 billion into the venture over the years only to have it picked up for $25 million out of bankruptcy in 1999 by Iridium Satellite LLC. Not the best recovery for the $4.4 billion in bonds that were outstanding at the time.
GHL will end up with 55% of the new entity, and it appears they plan to IPO list on Nasdaq hard upon. The equity holders will see about $77 million out of the transaction along with a hunk of stock in the new entity valued at around $300 million. The interesting part, however, is a cash injection by Greenhill that firm will spend to retire almost all of Iridium's debt.
There are value plays out there, it seems, and lots of dry powder to use on them. The company's new plans, however, look a bit like more of the same. $2 billion to replace their satellite fleet, this time with 10Mbps data capabilities. Wonder who the bondholders will be.
Greenhill affiliate to buy Iridium for $591 mln [Reuters]

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