Washington, D.C.-headquartered Intelsat completed its previously announced $1 billion purchase of the North American satellite fleet of New York-based Loral Space and Communications [LRLSQ].

The $1 billion paid by Intelsat includes $977 million for Loral’s North American fleet and related assets, as well as a $50 million deposit for the construction of a new Intelsat satellite to be built by Loral’s manufacturing unit, Palo Alto, Calif.-based Space Systems/Loral (SS/L). The transaction gives Intelsat its first North American satellites and a 20-percent share of the U.S. market, while Loral gains much-needed cash to pay the entire secured bank debt it owes and meets a “major milestone” in its plans to emerge from Chapter-11 bankruptcy reorganization.

Proceeds from the transaction will be used to pay in full Loral’s $967 million of outstanding secured bank debt, nearly half of the company’s total of $2 billion in principal debt obligations.

First announced last July, the agreement gives Intelsat the in-orbit Telstar 5, 6, 7 and 13 satellites as well as Telstar 8 scheduled for launch in the third quarter of 2004. The agreement also gives Intelsat the right to use the orbital slot at 77 degrees West longitude that once had been occupied by Telstar 4.

For in-depth coverage of this story, see an upcoming issue of Satellite News. For more information about subscribing to PBI Media’s satellite newsletters, check out our Web site at https://www.satellitetoday.com.