Motient Could Exit Bankruptcy by May 1

Bankrupcy court has approved a debt-for-equity swap with bondholders that will eliminate most of the value held by shareholders, leaving the company free to reopen on May 1, 2002.

by Roy Mark of www.internetnews.com [April 29, 2002]

The United States Bankruptcy Court for the Eastern District of Virginia has confirmed bankrupt Motient Corp.'s amended joint plan of reorganization. The plan is expected to be effective on May 1. As previously announced, the Reston, Va.-based company's bondholders will exchange their $335 million of senior notes for 25 million shares of Motient's new common stock, or approximately 97 percent of the company.

Current holders Motient's common stock will receive warrants for five percent of the new common stock subject to certain exercise terms and conditions. Under the plan, all shares of common stock outstanding on April 26, 2002, will be cancelled.

"We are extremely pleased to be emerging from these proceedings so quickly. The support we have received from our bondholders has allowed us to move through this process with relative ease. We believe we have taken the steps needed to solidify Motient's financial position," said Walter V. Purcell, Jr., president and chief executive officer of Motient. "We are especially proud of the fact that during these proceedings we were able to provide customers with the same high level of service they have come to expect of Motient. I would like to extend our deepest appreciation to our customers and business partners for their loyalty during this process. I would also like to extend my personal thanks to all of our employees who have worked so diligently during these past months to ensure the success of this process and the future of our company."

In January, 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.

"This restructuring allows Motient to proactively eliminate substantially all of its debt and to significantly improve our ability to achieve EBITDA break even later this year," said Purnell at the time of the bankruptcy filing. "Even more significant, the restructuring will not affect the operations of our nationwide wireless data network, our customers or our employees. For Motient's 250,000+ subscribers, it is business as usual. We are hopeful that the restructuring results in a dramatically stronger Motient Corp."

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 e-mail 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.

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