TAMPA, Fla. — Intelsat is poised to exit Chapter 11 in early 2022, after its chapter courtroom authorized a restructuring plan that cuts the satellite tv for pc operator’s debt from about $16 billion to $7 billion.
The approval from the U.S. Chapter Courtroom for the Japanese District of Virginia marks the ultimate courtroom milestone for a Chapter 11 course of that began in Could 2020.
Intelsat CEO Stephen Spengler stated the corporate now stands to emerge from Chapter 11 early subsequent 12 months, following regulatory approvals and securing the financing specified by the restructuring plan to recapitalize the enterprise.
He stated the chapter courtroom approval got here after the plan gained assist from all creditor teams throughout Intelsat’s complicated capital construction.
Broad assist got here after satellite tv for pc operator SES agreed to drop its opposition to the restructuring plan, in return for adjustments to how Intelsat distributes property throughout Intelsat entities post-bankruptcy.
The adjustments have been made amid authorized motion SES has lodged towards Intelsat over how C-band clearing proceeds ought to be divvied up amongst satellite tv for pc operators.
“If SES prevails on its claims, Intelsat will likely be obligated to make fee to SES in accordance with distributions provisions within the Amended Plan of Reorganization,” stated Suzanne Ong, vice chairman of exterior communications at SES.
SES additionally agreed to waive its demand for punitive damages as a part of the negotiation.
A courtroom listening to on SES’ declare is scheduled to begin Feb. 7.
Intelsat stated it’s in line to reap practically $5 billion in whole proceeds from clearing C-band spectrum, which the corporate stated will assist cut back its debt.
After assembly a key regulatory deadline for clearing part of the spectrum, the operator expects to obtain $1.2 billion of those proceeds in January.
Returning to development
Intelsat will emerge as a personal firm with former bondholders as fairness homeowners underneath the restructuring plan.
Spengler stated PIMCO, a U.S. funding administration agency, is ready to be Intelsat’s largest shareholder post-bankruptcy with a stake of about 30%.
In response to Spengler, who plans to retire shortly after the corporate exits Chapter 11, the restructuring plan “creates a a lot completely different Intelsat with a powerful monetary basis and monetary flexibility for the long run, and it positions us effectively to take part totally within the market” and put money into a “totally software-defined community primarily based round 5G know-how.”
Samer Halawi, Intelsat’s govt vice chairman and chief industrial officer, mentioned the corporate’s plans for 10 software-defined satellites in an October SpaceNews interview.
The corporate has issued a request for proposals (RFP) for the satellites as a part of a multi-orbit development technique that might additionally embody its personal low Earth orbit broadband constellation.
Halawi not too long ago announced plans to resign from Intelsat on the finish of the 12 months.