Barclays faces $100m Iridium hit

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The Independent Online
BARCLAYS BANK is facing a potential exposure of $100m (pounds 62m) following the collapse of Iridium, the satellite telephone venture that filed for voluntary Chapter 11 bankruptcy protection in the US last week.

Lehman Brothers, the investment bank, said in an internal note that the exposure was unlikely to be more than pounds 100m and would have no impact on second-half earnings.

Barclays said earlier this month it expected bad loan provisions in the half to be at similar levels to those in the first half.

The bank has not commented on its exposure to Iridium. However, sources say the figure is about $100m. The exposure takes the form of a share in an $800m syndicated loan Barclays managed with Chase, the US bank. Barclays also has some Iridium high-yielding bonds held through Barclays Capital.

Contrary to earlier reports from the US, Barclays is not part of the bondholders group that filed a bankruptcy petition late last week after Iridium failed to meet interest payments on some of its $1.5bn in bank loans.

Electronics group Motorola holds 18 per cent of Iridium.