SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest reported event): June 29, 2000
MOTIENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-23044 93-0976127
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
(703) 758-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
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ITEM 5. Other Events
On June 29, 2000, Motient Corporation ("we" or "us") entered into a series of
transactions, with a group of investors, relating to our satellite
communications business. These transactions are described below.
We have formed a new joint venture subsidiary, Motient Satellite Ventures LLC
("Satellite Ventures"), in which we own 80% of the membership interests. The
remaining 20% interest in Satellite Ventures is owned by three investors
controlled by Columbia Capital, Spectrum Equity Investors LP and Telcom
Ventures, L.L.C. (collectively, the "Investors"). The Investors paid $50 million
(in the aggregate) to Satellite Ventures in exchange for their 20% interest,
pursuant to an Investment Agreement, by and among Motient, Satellite Ventures,
and the Investors.
Of the $50 million payment received by Satellite Ventures, $6 million is being
retained by Satellite Ventures and will be used to fund certain research and
development activities, with the remaining $44 million to be paid to Motient
Services Inc. (which owns Motient's satellite and related assets), as described
below.
Satellite Ventures will conduct research and development activities to explore
the technical, strategic, and market potential of new wireless data
communications services making use of Motient's existing satellite network.
Satellite Ventures has signed a Research & Development, Marketing and Service
Agreement (the "R&D Agreement"), with Motient Services, under which Motient
Services will provide technical, engineering, and similar assistance to
Satellite Ventures. Motient Services will also provide Satellite Ventures with
dedicated bandwidth on Motient's satellite network, for the purpose of Satellite
Ventures' testing and R&D activities. In exchange for these access rights and
services, Satellite Ventures has paid Motient Services a one-time, up-front fee
of $20 million. The R&D Agreement has a three-year term, but would terminate
upon any consummation of the Asset Sale Agreement described below.
At any time during the next two years, the Investors have the right to elect to
purchase up to an additional 40% stake in Satellite Ventures, for an extra
payment of $120 million (which amount will increase by a specified daily amount,
after one year) (such payment is referred to as the "Additional Payment"). Upon
such exercise, Satellite Ventures will consummate the purchase of all of the
assets owned by Motient Services that relate to the satellite business, pursuant
to the terms of an Asset Sale Agreement, between Satellite Ventures and Motient
Services. The purchase price for such assets will be equal to the sum of $24
million (paid as a down payment in connection with the signing of the Asset Sale
Agreement), and the Additional Payment received by Satellite Ventures from the
Investors (i.e., for a total price of $144 million, increasing after the first
year). The consummation of any such transfer of assets to Satellite Ventures
pursuant to the Asset Sale Agreement would be subject to receipt of all
necessary governmental approvals and consents, including, for example, FCC
approval with respect to the transfer of Motient's FCC licenses with respect to
its satellite communications business, and any necessary approvals under the
Hart-Scott-Rodino Antitrust Improvements Act, as well as customary conditions
relating to due diligence review and similar matters.
Also at any time during the next two years, if the Investors decide that they do
not wish to acquire control of Satellite Ventures and acquire the satellite
assets of Motient Services as described above, they may convert their existing
minority position in Satellite Ventures into shares of common stock of Motient,
at a conversion price which will be set at the time of exercise, between $12 and
$20 per share, as specified in the Investment Agreement. The Investors may not
exercise this right, however, until after December 29, 2000, except under
certain limited circumstances.
Under the terms of the bank facility waivers received by Motient in connection
with these transactions, $2.75 million of the initial $44 million payment
received by Motient was used to repay outstanding amounts, and permanently
reduce commitments, under Motient's revolving credit facility, with the
remainder of the initial $44 million payment retained by Motient. If the
Investors elect to acquire control of Satellite Ventures and the Additional
Payment is made as described above, then Motient will be required to use 50% of
such proceeds to pay down outstanding balances and/or reduce commitments, under
its revolving credit facility.
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following documents are filed as exhibits to the report:
99.1 Press Release dated June 29, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOTIENT CORPORATION
By: /s/Randy S. Segal
Randy S. Segal
Senior Vice President, General
Counsel and Secretary
Date: June 29, 2000
