RealTime IT News

Motient Completes Next Step in Reorganization Plan

Motient Corp. plans to complete its pre-negotiated restructuring and exit Chapter 11 bankruptcy soon after April 25. The restructuring plan will complete the bondholder agreement to eliminate $335 million in bondholder debt and an associated $40 million in annual interest payments. Under the terms of the plan, bondholders will convert Motient's senior notes to equity in the company.

In January, the Reston, Va.-based Motient claimed in court documents that it had $238 million in assets and $495 million in debts. Company officials also said the bankruptcy was pre-arranged and that it was working with creditors on a plan that would allow senior noteholders to exchange notes for stock.

"Our anticipated quick exit from bankruptcy and the elimination of 100 percent of our bondholder debt, positions Motient for long-term financial viability and success, and we are looking toward profitability," said Walter Purnell, chief executive officer of Motient. "Throughout our restructuring we have focused on growing our business through the expansion of our network and introduction of new products, while continuing our commitment and service to our customer base of more than 270,000 subscribers."

Last week, Motient sent ballots to for approval of the restructuring plan to its' stockholders with the deadline for voting set for April 16. A confirmation hearing is scheduled for April 25.

Last fall, Motient defaulted on a $20.5 million bond interest payment, which set off a series of events including laying off 25 percent of its staff and selling almost 10 million shares of Motient's XM Radio holdings. The company also cancelled a proposed $181.5 million merger with Dallas-based Rare Medium Group, Inc.

Motient owns and operates the nation's largest two-way wireless packet data network and provides a wide-range of mobile and Internet communications services principally to business-to-business customers and enterprises. The company provides eLink and BlackBerry by Motient two-way wireless email services. Motient serves a variety of markets including mobile professionals, telemetry, transportation and field service, offering coverage to all 50 states, Puerto Rico and the U.S. Virgin Islands.