Updated from 8:28 a.m. EDT


, formerly

ICO Global Communications

, emerged from Chapter 11 bankruptcy on Wednesday following a $1.2 billion bailout by billionaire investor Craig McCaw.

In a statement, New ICO said it would propose a merger between New ICO and McCaw's other venture,

Teledesic LLC

, which plans to transmit computer traffic, voice and data via satellite to parts of the world where fiber-optic lines do not exist.

Under the terms of the proposal, New ICO and Teledesic would become wholly owned subsidiaries of

ICO-Teledesic Global

, a new holding company that includes the satellite assets of McCaw's private investment company,

Eagle River Investments


Eagle River, based in Bellevue, Wash., has said it wanted ICO's partially built network because of its focus on data services, a feature expected to be a major selling point of Teledesic's satellite communications network.

Other investors in Teledesic include


(MSFT) - Get Report

founder Bill Gates, who co-founded Teledesic,



and Saudi Prince Alwaleed Bin Talal.

A spokesman for ICO declared false a report from

The Wall Street Journal

Wednesday that these moves could boost revenue for satellite maker

Hughes Electronics


as ICO would call for eight additional satellites.

Joe Tedino, a company spokesman for ICO, said, "Unfortunately, the report in the

Wall Street


was just wrong. There will not be an 8-satellite increase to the New ICO constellation."

Hughes shares were trading down 2 1/8, or 2%, at 87 5/8 in afternoon trading. (Hughes closed down 1 7/8, or 2%, at 87 7/8.)