Space

Intelsat discloses plans to reorganize and slash debt

Summary

Intelsat SA revealed a February 12 reorganization process to minimize the Luxembourg-centered satellite communications fleet operator’s debt from almost $15 billion to around $7 billion. Intelsat’s proposal has been accepted by creditors liable for about $3.8 billion of Intelsat’s debt as well […]

Intelsat SA revealed a February 12 reorganization process to minimize the Luxembourg-centered satellite communications fleet operator’s debt from almost $15 billion to around $7 billion. Intelsat’s proposal has been accepted by creditors liable for about $3.8 billion of Intelsat’s debt as well as the firm is awaiting permission from new creditors, as per a Reorganization Plan submitted with the United States on February 12. Bankruptcy Court for the Virginia Eastern District.

Under the proposal, with 95 percent of the stock going to non – secured creditors of affiliate Intelsat Jackson, Intelsat will issue new shares. Intelsat requested a Bankruptcy Court briefing on the plan on March 17, 2021. Per an Intelsat press release, if authorized, the company would emerge from Chapter 11 in the second half of the year 2021. In an attempt to remove about half of its $15 billion debt as well as free up funds to buy satellites to secure C-band spectrum for the United States 5G networks in return for United States funding, Intelsat applied for bankruptcy court protection in the month of May from the Federal Communications Commission.

Intelsat, the second-largest revenue satellite operator in the world, applied for Chapter 11 bankruptcy protection at the end of May 13 as a way of easing its debt burden of approximately $15 billion and engaging in an FCC spectrum clearing scheme. Intelsat stated it had received a $1 billion debtor-in-possession funding agreement that will allow companies to finance ongoing operations after court approval as well as begin clearing the C-band spectrum underneath a scheme that might net $4.86 billion for the operator.

The operator centered in Luxembourg as well as Virginia has sued in the United States for Chapter 11 Bankruptcy Court for the Virginia’s Eastern District, Richmond. The business maintains a fleet of approximately 50 satellites and is expected to deploy another, the Galaxy-30, on the Ariane 5 rocket this summer. As per a report Intelsat submitted with the United States Securities and Exchange Commission on February 12, Intelsat would earn a maximum of around $4.86 billion if it achieves the FCC resolving spectrum deadlines. As a component of its spectrum-clearing program, Intelsat has purchased seven satellites.

Intelsat is also fighting a lawsuit SES made in the United States while negotiating its exit from bankruptcy. The Eastern District of Virginia Bankruptcy Court claims at least $1.8 billion in damages resulting from Intelsat’s removal from C-Band Alliance. As per Intelsat’s February 12 Securities and Exchange Commission statement, “the trial on the SES evidence of claim was set to be considered by the Bankruptcy Court starting on June 28, 2021.”