Intelsat To Pay $1 Billion For Loral’s North American Satellites
Intelsat is addressing one of its most glaring weaknesses by signing an agreement to acquire for $1 billion six Loral Space and Communications [NYSE: LOR]satellites and orbital slots to serve North America.
The satellites – four already in-orbit and two under construction – will give needed U.S. coverage to Intelsat and increase its presence in the cable television and broadcasting market. Intelsat, already operating in more than 200 countries and territories, is looking to complement its global network that currently includes capacity on 26 satellites.
Loral also announced that it had filed a voluntary petition for Chapter 11 reorganization. The sale of the satellites to Intelsat is expected to be finalized at the conclusion of the bankruptcy court reorganization. If approved by the bankruptcy court, the sale would also be subject to regulatory approvals and the satisfaction of other conditions. The transaction also is subject to Intelsat shareholder approval.
Loral expects to use most of the proceeds from the $1 billion sale of the North American satellites to repay all $959 million of its outstanding secured bank debt. The transaction is expected to close within four to six months.
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