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Motorola may take additional $500 m Iridium charge

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CIOL Bureau
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BANGALORE: Motorola Inc. said it could take an additional charge of $500 million during the fourth quarter on its exposure to investments in Iridium LLC. Motorola took a $994 million charge during the third quarter to increase its reserve and to write down the remaining value of the Iridium bonds it holds. Motorola holds an 18 per cent stake in Iridium.



The company's total exposure to Iridium is about $2.3 billion, and Motorola has set aside $1.8 billion in reserves so far. Motorola revealed in a filing that it had paid about $743 million to banks for debts it guaranteed on behalf of Iridium. "With this payment, the company believes it has satisfied all of its guarantee obligations under this agreement,'' Motorola said in its quarterly earnings report filed with the Securities and Exchange Commission. The company said that by satisfying its guarantee obligations, it avoided paying interest and monthly fees to the banks that issued the credit facilities

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