Citing weakness in the commercial satellite business, Loral Space & Communications and certain of its subsidiaries filed voluntary Chapter 11 petitions. In a related transaction, Loral will sell six satellites and the rights to their orbital locations to Intelsat for up to $1 billion. Loral intends to reorganize around its remaining fleet of five satellites and its satellite manufacturing operations Loral will also continue to own and operate Space Systems/Loral (SS/L), which builds satellites and satellite systems for commercial and government customers.
http://www.loral.com
- Intelsat said the proposed acquisition of the Loral assets would complement the Intelsat global network, which includes capacity on 26 satellites. The Loral satellites would add complete coverage of the important North American market and increase Intelsat's customer base in the cable television and broadcasting segments. Of the six satellites to be purchased, four are operational, serving cable television, broadcast and private data network customers in North America. Two satellites are currently under construction and are scheduled to be launched into North American orbital locations in the coming year. Intelsat would assume responsibility for launch and insurance-related costs for one of the satellites currently under construction and would make a $100 million secured down payment on a future satellite to be built by Space Systems/Loral to Intelsat's specifications.
- Last month, Loral Space & Communications and Alcatel settled all outstanding issues between them, including a contract dispute that has been in arbitration. Loral will pay Alcatel $5 million now and an additional $8 million within one year of closing. As part of the settlement, Alcatel will transfer its minority interest in CyberStar to Loral, and Loral will transfer to Alcatel its minority interests in two Alcatel affiliates (Europe*Star and SkyBridge) that Loral had previously written off.
