Bankruptcy Court Approves Intelsat Reorganization Plan
Intelsat’s bankruptcy court has approved the satellite operator’s plan or reorganization, which will bring the company out of bankruptcy with less than half of its debt. This is the final milestone in Intelsat’s financial restructuring process, and the company expects to emerge from bankruptcy in early 2022.
Intelsat said Thursday that all of its creditor groups supported the plan, following extensive negotiations. The satellite operator has been in Chapter 11 since May 2020, and has spent most of 2021 working to emerge from bankruptcy. It first announced a plan in February, and then an amended plan in August.
The confirmed plan will reduce Intelsat’s debt by more than half – from approximately $16 billion to $7 billion. It will also take Intelsat off the public markets, making it a private company with new equity owners.
“We have achieved all of the goals we identified at the outset of the process, including a substantial reduction of our legacy debt burden,” said Intelsat CEO Stephen Spengler. “With a strengthened balance sheet, strong operating model, and unparalleled global orbital and spectrum rights, scale, and partnerships, we will be better positioned to advance our strategic objectives, accelerate our growth trajectory, and fuel the success of our customers and other key stakeholders.”
The company still needs regulatory approvals, completion of certain corporate actions, and satisfaction of other customary conditions to emerge from bankruptcy.
Intelsat is set for a leadership change once the Chapter 11 process is complete. Spengler plans to retire once financial restructuring is complete and the company selects the next CEO. A search is currently underway. In addition, COO Samer Halawi has resigned and will leave the company at the end of the year.