- Press Release
- August 12, 2022
Intelsat Signs Agreement to Purchase Loral’s North American Satellite Services Assets
Purchase of Satellites and Orbital Locations Adds Complete U.S. Coverage to
Intelsat’s Global System; Increases Its Presence in the Cable Television and
Intelsat, Ltd., a global satellite
communications leader providing services in over 200 countries and
territories, today announced that it has signed a $1.0 billion definitive
asset purchase agreement with Loral Space & Communications Corporation for
six satellites and the rights to their orbital locations. The proposed
acquisition of the Loral assets would complement Intelsat’s global network,
which includes capacity on 26 satellites, by adding complete coverage of the
important North American market and by increasing Intelsat’s customer base
in the cable television and broadcasting segments. The total consideration
for the assets may increase or decrease based on business performance and as
provided for in the agreement.
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.
"Intelsat has been pursuing a focused strategy that includes seeking
strategic transactions that enhance Intelsat’s service application mix and
geographic coverage," said Conny Kullman, chief executive officer of
Intelsat. "This transaction, if consummated, meets both of these objectives
and enhances our position as a global leader in the fixed satellite services
sector. The transaction would provide Intelsat a North American franchise
that, given the scarcity of orbital locations, is virtually impossible to
build on an organic basis and can be quickly integrated into our business."
Kullman continued, "We look forward to offering North American broadcast and
cable customers the high reliability, stability, and experience that
Intelsat has delivered for nearly 40 years. Existing and future customers
will benefit through global access and our investment in new technology and
infrastructure. This opportunity comes at a time when Intelsat’s satellite
fleet replacement program is nearing completion, and the resulting strong
cash flows enable us to adopt a transaction financing structure that
preserves our strong balance sheet."
Earlier today, Loral filed a voluntary petition for reorganization under
Chapter 11 under the U.S. Bankruptcy Code (the "Code"), and the acquisition
is expected to occur at the conclusion of an auction process under Section
363(b) of the Code. If approved by the bankruptcy court, the transaction
will be subject to the receipt of regulatory approvals and the satisfaction
of other conditions. The transaction is also subject to Intelsat
shareholder approval. The company has secured financing commitments,
subject to certain conditions, for the full transaction consideration, and
the Intelsat Board of Directors has approved the transaction. Intelsat
expects that all required approvals could be obtained, and conditions to
closing could be satisfied, by early to mid-2004.
The assets to be purchased include the Telstar 4, Telstar 5, Telstar 6 and
Telstar 7 satellites, which today provide North American coverage from the
89?W, 97?W, 93?W, and 129?W orbital locations. The agreement also includes
two satellites currently under construction, Telstar 8 and Telstar 13. The
Telstar 13 satellite, co-owned with EchoStar Communications Corporation, is
expected to launch in early August and will be located at the 121?W orbital
location. The Telstar 8 satellite is scheduled to launch into the 89?W
orbital location in early 2004, at which time Telstar 4 will move to 77?W.
The in-orbit satellites to be acquired currently carry traffic for premiere
broadcasters, cable operators and private data network operators, such as
CBS and Fox Broadcasting, and have a contracted backlog of approximately
$550 million. Collectively, the satellites have an average remaining
orbital maneuver life of 13.7 years.
Morgan Stanley is acting as sole financial advisor to Intelsat in connection
with this transaction. In addition, Morgan Stanley is structuring the
acquisition financing for Intelsat. Sullivan & Cromwell LLP is acting as
legal advisor to Intelsat. Financing for the transaction will be arranged by
Citigroup, BNP Paribas and Morgan Stanley.
Intelsat, Ltd. offers telephony, corporate network, video and Internet
solutions around the globe via capacity on 26 geosynchronous satellites in
prime orbital locations. Customers in approximately 200 countries rely on
Intelsat satellites and ground resources for quality connections, global
reach and reliability. For more information, visit www.intelsat.com.
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