Loral Skynet Seeks $141 M For Telstar 4
The in-orbit failure of Loral Skynet‘s Telstar 4 satellite poses significant financial consequences. The company yesterday declared the satellite a “total loss” and announced plans to seek $141 million from the spacecraft’s insurers.
The Telstar 4 is one of six Loral Skynet satellites, along with their orbital slots, that Bermuda-based Intelsat Ltd. agreed last month to purchase for $1 billion. Loral Skynet and its parent, Loral Space and Communications [OTC BB: LRLSQ], appear protected from the financial fallout due to a provision in the sales agreement that requires only the $1 billion purchase price to be reduced by the amount of an insurance pay out for a failed satellite.
However, Loral’s sale to Intelsat of six North American satellites and orbital slots cannot be completed until after the bankruptcy court conducts an auction for the assets that could attract rival bidders. Loral, operating under Chapter 11 protection, was unable to re-establish contact with the Telstar 4 satellite after the spacecraft incurred a short circuit of its primary power bus on Sept. 19.
For more on this story, check out the Sept. 29 issue of SATELLITE NEWS. For more information about subscribing to PBI Media’s satellite newsletters, visit our Web site at http://www.satellitetoday.com