Loral Space & Communications Ltd. filed a revised plan of reorganization with the Bankruptcy Court. The plan revises terms of a previous plan filed Dec. 5, 2004, reflects an agreement between the company, the creditors’ committee and the ad-hoc committee of Space Systems/Loral (SS/L) trade creditors. The plan, subject to confirmation by the Bankruptcy Court, provides for Loral’s two businesses–satellite manufacturing (New SS/L) and satellite services (New Skynet)–to emerge intact as separate subsidiaries of a reorganized Loral (New Loral); New SS/L will emerge debt-free and continue its current activities, including completion of all satellites under construction or on order and active pursuit of additional new satellite manufacturing contracts; New Skynet will continue to provide transponder leasing, network and professional services to current and prospective customers; and New Loral will emerge as a public company under current management and will seek listing on a major stock exchange.

With regard to paying creditors, the plan calls for the holders of allowed claims against SS/L and Loral SpaceCom to be paid in full in cash, including interest from the petition date to the effective date of the plan. Loral Orion‘s unsecured creditors will receive approximately 80 percent of New Loral common stock and their pro rata share of $200 million of preferred stock issued by New Skynet. These creditors also will be offered the right to subscribe to purchase their pro-rate share of $120 million in new senior secured noted of New Skynet. Loral bondholders and certain other unsecured creditors will receive approximately 20 percent of the common stock of New Loral. Loral’s existing common and preferred stock will be canceled and no distribution will be made to the holders of such stock.