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Loral Raises $300 Million In Securities Sale

By | October 23, 2006

      Loral Space & Communications Inc. [LORL] entered a deal to sell securities to affiliates of MHR Fund Management LLC, Loral’s largest shareholder,

      The MHR entities will buy $300 million worth of convertible perpetual preferred stock.

      Loral plans to use the money for both internal and external growth opportunities in the satellite communications industry, including strategic transactions or alliances.

      Loral’s agreement with MHR was negotiated through and unanimously recommended by a special committee of independent directors of Loral formed to advise the board on Loral’s financing alternatives. The committee’s legal and financial advisors were King & Spalding LLP and North Point Advisors, respectively. Loral’s financial advisor in connection with this transaction was Morgan Stanley & Co. Inc,. and MHR was advised by Deutsche Bank.

      Since Loral’s restructuring began in 2003, the company stated, it has seen its Space Systems/Loral manufacturing subsidiary book 14 new satellite construction contracts, more than any other commercial manufacturer over the same period.

      Its fixed satellite services business, Loral Skynet, has continued to show strong, steady results from its core leasing business, according to the company.

      Loral is expanding its satellite fleet with the construction of Telstar 11N and is exploring additional capacity opportunities that would leverage its substantial current and historical customer relationships.

      MHR will purchase $41 million and $259 million of new Loral Space & Communications Inc. 7 1/2 percent Series A and Series B convertible perpetual preferred stock, respectively.

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