NEW CEO EXCITED ABOUT INMARSAT FUTURE IN U.S.
Market conditions, not “need for cash,” delayed Inmarsat IPO required by Congress under Orbit Act, CEO Michael Storey told Internet via Satellite Conference sponsored by Center of Business Intelligence in Washington May 14. “We've been ready to do an IPO for a long time” as final stage of privatization, he said: “We are waiting until general market conditions become more amiable. We have very little debt. It’s not a critical thing, but it must be done to gain market access in the U.S.”
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Privatization has changed face of Inmarsat. Company has few reminders of its former identity as intergovernmental organization that operated as monopoly. Storey described “transition” in last 18 months as “remarkably successful.” He said privatization had “taken the handcuffs off the organization” and Inmarsat was in position to move forward because of many changes made throughout company. “We've established a culture of corporate governance,” Storey said: “We have a strong desire for increased commercialization.” Inmarsat has established redundancy program that has cut staff to 310 employees from 400: “Some didn’t want to work in this environment and we gave them a very generous [financial] incentive to leave.” Company also established employee shareholder program and redefined responsibilities of management team: “We improved profitability” 20% in one month.
Despite changes, company remains profitable and provides below-market prices for services, Storey said. Inmarsat posted before-tax profit of $119.4 million on revenue of $417 million in 1999. Results for 2000 will be released next month, Storey said. “We've been able to measure what employees and customers think about us,” he said. “It’s been a tremendous positive gain” in last 12 months. “People have been able to adapt to the new regime. We've increased by tenfold our investment in people, management and employees.”
Regulatory issues continue to be factor as company attempts to find place in U.S. market, Storey said. He called process of acquiring spectrum from FCC “mystical” and “political,” but said political process that set privatization in motion was “fair.” He told us company had many U.S. customers, which helped cause during congressional hearings: “We thought they were very fair.” Storey admitted Inmarsat didn’t face much of acrimonious opposition experienced by former IGO Intelsat. “We weren’t a target,” he said. “We received U.S. market access and we plan to take advantage of it.”