Orbcomm says it will seek bankruptcy court approval to auction off the company as a going concern, what the company describes as the world's first fully operational low-Earth orbit satellite- based data communication system.
Orbcomm has been operating under Chapter 11 protection since September 15, 2000. During this period, Orbcomm has continued to provide uninterrupted data communication services to its customers and business partners around the world. Orbcomm indicated that the prospective investors with whom it has held meaningful discussions have expressed a strong desire to continue providing data communication services to the company's customers.
"We believe that the best way to complete a transaction that provides funding for Orbcomm within our time requirements is to begin an auction process now," said Scott L. Webster, Orbcomm's Chairman and Chief Executive Officer.
"We have reserved what we believe to be sufficient funds to retain our current staff and support ongoing operations, so as to continue to provide service to our customers during the auction period," Webster added.
Orbcomm indicated that over the past eight months, it has identified and educated a large number of potential financial and strategic investors about the overall business potential of the company.
During this same period, Orbcomm has also significantly reduced expenses, signed on new customers, and continued to provide high quality service to about 37,000 subscriber devices in use around the world.
The company also reported that the satellite constellation, ground stations, customer solutions, and distribution networks are all working well, and demand for Orbcomm service has remained strong as evidenced by the current number of customers and network usage.
If Orbcomm receives bankruptcy court approval for the auction, it plans to issue an invitation to submit bids to prospective bidders shortly thereafter. The auction process would then take place during the rest of the month of February.
After evaluating all bids received, Orbcomm would seek to obtain bankruptcy court approval of what it concludes represents the "highest and best" bid in early March, with the transaction closing shortly thereafter.
