Intelsat claims 75% support for restructuring plan

Satellite operator Intelsat says it has won the support of key creditor groups for a restructuring plan that would see the company become a privately owned entity with new shareholders and reduce its debt by more than half – from nearly US$15 billion to US$7 billion.

The move comes after Intelsat recently requested an extension of its Chapter 11 bankruptcy to enable it to finalise its restructuring plan.

Intelsat, which has filed the amended proposal in its Chapter 11 proceedings pending before the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, says it now has the support of holders of approximately US$11 billion, or nearly 75%, of the Company’s funded debt.

According to Intelsat, these creditors have signed a support agreement that binds their support for the amended plan. The company is seeking court approval at a hearing scheduled for September 1.

Under the amended plan, Intelsat will emerge as a private company, with unsecured bondholders taking ownership by converting their holdings to new shares. It said the plan was designed “to best advance its strategic objectives and accelerate its growth trajectory, with a path to becoming publicly traded again at some point in the next five years”.

Intelsat is currently in dispute with rival satellite operator SES over a US$1.8 billion breach of contract claim filed by SES Americom over the splitting of proceeds from clearance of C-band spectrum in the US. Intelsat stands to benefit from an FCC ruling that resulted in an agreement between the pair being terminated.