"It's certain that iridium won't meet terms of its $800-million credit facility, which requires the sat-phone company to have 27,000 subscribers this month," the report said in today's edition.

The deadline for the bank-loan requirements is May 31. According to the report, Iridium is still talking with lenders about ways to avoid default.

News that the company will default on bank loans follows the departure of the chief executive and financial officer. Iridium's shares have fallen 80 per cent in the last year, and the company faces numerous lawsuits from shareholders over its predicament, the report says.

Iridium, which is 19.5 per cent owned by motorola, had debt of about $3.02 billion as of March 31, it said. In the event of bankruptcy, banks are the first to be repaid, bondholders are secondand equityholders are the last.

Indian government and financial institutions have invested Rs 580 crore in the Iridium project.

An official of Iridium (India) told that the company has about 100 subscribers in the country and the number may go up to 300 or 400 in six months.