ICO Global Communications' North American unit files for Chapter 11

By Jennifer Lanning Drey

Portland, Ore., May 15 - ICO Global Communications (Holdings) Ltd. subsidiary DBSD North America, Inc., formerly ICO North America, and its subsidiaries filed for Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Southern District of New York, according to an 8-K filed with the Securities and Exchange Commission.

ICO Global is not a debtor in the case.

In connection with the Chapter 11 filing, DBSD and ICO Global entered into a support agreement with indenture trustee Bank of New York Mellon and holders of the company's 7.5% convertible senior secured notes due 2009.

Participating noteholders holding approximately 57% of the outstanding notes have agreed to vote in favor of the pre-packaged Chapter 11 plan.

The lenders under the company's amended and restated revolving credit agreement have not agreed to the terms of the pre-packaged filing.

Under the pre-packaged agreement, the entire outstanding principal amount and accrued interest of the notes, which was $750 million on May 15, will be converted into 95% of the outstanding shares of common stock of the restructured DBSD.

ICO Global will own 5% of the outstanding common stock.

In addition, ICO Global will receive warrants to purchase $0.01 per share up to an additional 10% of the common stock of DBSD, exercisable upon certain valuation events.

Current equity interests in DBSD will be canceled.

According to the term sheet filed in connection with the bankruptcy filing, obligations to other DBSD creditors not addressed by the term sheet will remain outstanding under their current terms, provided that DBSD and the principal holders mutually agree upon the treatment of other creditors.

Debt details

According to a Friday court filing, DBSD estimated its assets to be between $500 million and $1 billion and liabilities in the same range at the time of the filing.

Its largest unsecured creditors include:

• Space Systems/Loral, Palo Alto, Calif., with a $5.21 million trade claim;

• Hughes Network Systems, LLC, Germantown, Md., with a $1.85 million trade claim;

• Alcatel-Lucent, Murray Hill, N.J., with a $1.47 million trade claim;

• Deloitte & Touche LLP, Philadelphia, with a $503,924 trade claim; and

• Delphi Corp., Kokomo, Ind., with a $492,752 trade claim.

ICO is a Reston, Va., mobile satellite services company. Its Chapter 11 case number is 09-13061.

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