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. Last Updated: 07/27/2016

Motorola Finances Satellite Launches by Russian Firm

The U. S. firm Motorola Inc. has completed initial financing for an ambitious $10 billion satellite telecommunications network that will give a huge boost to Khrunichev Enterprises, Russia's biggest rocket factory, a Khrunichev official said Thursday.


Motorola, a large telecommunications firm, has arranged $1, 176 million in financing commitments for the project, which will use Khrunichev to launch low-orbit satellites, creating a global international telephone network by 1998.


Alexander Kondratyev, head of the international economic relations department at Khrunichev, said that the project would be Khrunichev's biggest foreign order yet.


He said his firm had been allotted $40 million in shares in the first emission of the consortium called Iridium Inc.


Khrunichev signed a preliminary contract in February with Iridium to launch 21 of the 77 satellites needed for the system on three of Khrunichev's famous Proton rockets.


He said that Khrunichev's shares in the project would be paid for later, using some of the $200 million that Khrunichev expected to earn from the project. The Russian government had given special permission to reinvest the profits, Kondratyev said.


Kondratyev said that Khrunichev would launch its first rocket for Iridium in late 1996.


Anatoly Kopylov, Motorola's Moscow representative, said he was confident that the Iridium would not be affected by a diplomatic conflict that is delaying another Khrunichev project to launch a satellite for the Inmarsat telecommunications consortium.


The Inmarsat deal had been blocked by a dispute between the United States and Russia over the proposed sale of Khrunichev rocket engines to India.


A top Russian space official said last week that the U. S. administration has threatened to block an export license for the Inmarsat deal if Russia proceeds with the rocket engine sale.


Kopylov said the Iridium project had already obtained a special U. S. license for the launches.


Motorola has committed ? 270 million to the first stage of the project out of a total of ? 800 million. Other major investors will include companies such as U. S. firms Lockheed Corp. and Sprint Corp. , as well as Japanese heavyweight Nippon Iridium Corp. which includes Sony, Mitsubishi Corp. and Mitsui Co. Chinese, Saudi Arabian, Thai, Canadian, Venezualan and Italian firms have joined in as well.


Motorola has a five-year, $5 billion contract with Iridium for providing the space system, and another $4. 1 billion follow-up contract for operating the system for the first five years.