Liberty Eyes Astrolink Assets5/26/2002 8:00 PM Eastern
Liberty Satellite & Technology Inc. last week said it has signed non-binding letters of intent with its partners in AstroLink International LLC.
It has agreed with Lockheed Martin Corp., TRW Inc. and Telespazio S.p.A. to restructure AstroLink, which was created in 1999 to develop a global, satellite-delivered broadband service.
If the agreement is consummated, Liberty Satellite will acquire all of AstroLink's assets, and all claims related to the company will be settled. The parties did not disclose terms. Liberty Media will contribute assets to Liberty Satellite in exchange for a stake in the company.
Liberty Satellite director of investor relations John Beattie said that negotiations were ongoing, but could not give a timeframe for when a definitive deal would be announced, or even offer assurances that a pact would be reached.
Many satellite insiders have already given up on AstroLink's long-term chances of survival. But Beattie said Liberty Satellite has always believed in the AstroLink concept, and added that the company is also working to restructure WildBlue Communications Inc., although those talks have not reached the letter-of-intent stage.
WildBlue also aims to provide high-speed Internet access via satellite.
EchoStar Communications Corp. earlier this year announced it that had written down its investment in WildBlue and halted any further funding of the company. EchoStar also wrote down its investment in StarBand Communications LLC, which offers a broadband-via-satellite service to EchoStar's Dish Network customers, among others.
According to a statement by Lockheed Martin, the Liberty/AstroLink deal is subject to third-party and government consent, as well as the termination or renegotiation of AstroLink's prior procurement contracts on terms acceptable to Liberty Satellite.
Liberty Satellite said in a press release that it would pursue a revised operating plan for Astrolink, "taking into account current financial and market factors." Beattie could not offer details of a new operating plan.
In its heyday, Liberty Satellite — then known as TCI Satellite — was a holding company for Liberty Media Inc.'s interests in PrimeStar Inc., before they were sold to DirecTV Inc. in 1999.
Today, the company controls Ascent Entertainment Group, which owns a majority interest in On Command Corp., which delivers television programming to hotels via satellite.
Share prices for Liberty Satellite were down more than 7 percent Wednesday, after the AstroLink announcement was released late Tuesday, following the market's close.