South African Company May Take Over ICO’s International Satellite Assets
A South African company may end up with the ICO Global’s international satellite and spectrum assests under a February agreement between the companies, ICO said in an SEC filing. The deal gives the South African company, Jay & Jayendra, an option to take over ICO’s medium earth orbit assets, the filing says. The agreement doesn’t include the North American satellite and spectrum rights, which are being sold to Dish Network by ICO’s bankrupt subsidiary DBSD. The spectrum rights are probably the most valuable piece of the purchase by Jay & Jayendra, said an analyst. The filing is at http://xrl.us/bitkwa.
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The option allows Jay & Jayendra to take over ICO’s medium low earth orbit assets, the filing said. The assets include ICO’s launched F2 satellite, “ten additional MEO satellites in various stages of completion, related ground station equipment, and the right to use certain C-band radio frequencies globally and S-band frequencies outside of North America,” the company said. Plans for using the assets remain unclear. “Its plausible that this is about the spectrum rights to the 2 GHz band outside Europe and North America,” said Tim Farrar, president of TMF Associates. “I'm not sure what their plan would be for exploiting it, though.” We couldn’t reach Jay & Jayendra.
Jay & Jayendra has from April 1 to Sept. 1 to decide whether to acquire the assets. If the company chooses to take over the assets and gets regulatory approval, it will “pay the [ICO] a nominal amount of cash and warrants to acquire a 5 percent equity interest” in the owners of the assets, the filing said. Dish Network would have the option to take over the MEO assets if Jay & Jayendra declines to, ICO said in the filing. If neither takes over the MEO assets, ICO “will likely decommission F2 and begin the process of disposing of its” other MEO assets, the company said.
Dish will take over the DBSD North American satellite and spectrum rights if the FCC goes along. Under that deal, which a bankruptcy judge recently approved (CD March 16 p11), ICO will sell Dish the spectrum rights of DBSD’s G1 satellite. Dish will pay $1.4 billion for all of the reorganized DBSD’s stock, including $325 million that will go to ICO, the filing said. Dish also “agreed to indemnify” ICO “from all claims against and expenses incurred” by ICO in connection with Sprint’s efforts to recoup costs for clear broadcast auxiliary spectrum. Sprint has sought about $100 million from each of the S-band licensees, DBSD and TerreStar, after clearing the band.