Williams Communications will buy all substantial assets of iBEAM Broadcasting Corp. for $25 million in cash, it says, even as iBEAM filed for Chapter 11 bankruptcy in Delaware yesterday.
Under the deal, Williams will lend up to $18 million to iBEAM to keep it running until the deal closes, says Williams spokesman Jeff Pounds. "That's the capital in place," he says. "If we were the successful bidder, that amount would be paid back out of the asset sale. In a sense, it's included in the $25 million."
If another bidder wins, the amount would still be paid back from the sale, he says. Williams "hopes" the amount will be less than $18 million, but that depends upon "how efficiently the business is run between now and when it closes," he says. Pounds had no set date, but the sale and loan are subject to bankruptcy court approval, a process that could take up to 90 days.
On June 25, Williams invested $20 million in cash and $10 million in services in iBEAM in exchange for a 49 percent ownership in the company. Pounds says the $10 million in services would be recouped through revenue, if Williams gets the company. He could not say what would become of the$20 million cash investment.
The deal also includes "substantially all" of iBEAM's customer contracts, and its facility and equipment assets.
If Williams gets court approval of its bid, it will integrate iBEAM's streaming and webcasting business into its Vyvx Broadband Media unit, it says.