A group of American private investors yesterday made a last minute attempt to rescue the $5bn (£3.3bn) satellite telephone service Iridium, which was yesterday forced into liquidation.

Iridium, which has Motorola as a shareholder and backer, was set a deadline of last Friday by the court to attract a buyer for its assets which include 66 satellites.

The company, which was widely regarded to have suffered from poor marketing, high charges and expensive, heavy handsets, failed to live up to the promise of vast mobile communities hooked up to large satellite networks.

It failed to attract a buyer and it was only yesterday that Merit Studios, a US software and e-commerce group, emerged as a possible white knight.

Merit sent an email to Iridium's lawyers saying it represented a group of private investors who wanted to use the satellite system to create an additional transmission network for data and the internet.

Merit, which would rename the company Meridium, proposes to collect a fee from message senders for the use of the satellite service.

New shares would be issued to Iridium's creditors, representing 30% of the company, as well as receiving 20% of the new profits for as long as it required to pay back Iridium's debts.

All Iridium shareholders would also get 30% of the new company while the private investors who are prepared to back the rescue would get 10% for investing £65m.

Randy Broukman, Iridium's chief operating officer, said he was "deeply saddened" by the court's ruling which will involved destroying the group's 66 satellites when they are sent back into the earth's atmosphere to burn up.

"I particularly regret the effect this will have on our customers," Mr Broukman said.

Iridium, set up in 1998 to provide a satellite mobile service anywhere in the world, has 55,000 customers. The company failed to meet subscriber numbers even after after slashing prices. It went into a voluntary bankruptcy in August.

Iridium thought it had the support in February of a group of investors, led by American telecommunications pioneer Craig McCaw, who agreed to provide £49m in interim financing for Iridium. The proposal was withdrawn.

Mr McCaw has long shared plans with his friend Bill Gates, the Microsoft chairman, to develop a network of satellites to connect mobile internet users. He switched his support ICO Global Communications, based in Hammersmith, west London, late last year when he joined in a £1.2bn rescue for the company.

Motorola said despite the collapse of Iridium it believed that satellite technology would continue to succeed. The company provided a list of satellite service providers including American Mobile Satellite Corporation, Globalstar and Inmarsat for Iridium's customers to switch to.