Intelsat Obtains Bankruptcy Court Approval to Exit Chapter 11 in Early 2022


TAMPA, Fla. — Intelsat is on track to exit Chapter 11 in early 2022, after its bankruptcy court approved a restructuring plan that cuts the satellite operator’s debt from about $16 billion to 7 billions of dollars.

The approval of the United States Bankruptcy Court for the Eastern District of Virginia marks the final judicial step in a Chapter 11 process that began in May 2020.

Intelsat CEO Stephen Spengler said the company will now exit Chapter 11 early next year, following regulatory approvals and securing funding under the restructuring plan to recapitalize the business.

He said the bankruptcy court approval came after the plan won support from all creditor groups across Intelsat’s complex capital structure.

Broad support came after satellite operator SES agreed to drop its opposition to the restructuring plan, in exchange for changes to how Intelsat distributes assets among Intelsat entities after bankruptcy.

The changes were made as part of a lawsuit brought by SES against Intelsat over how C-band compensation proceeds should be divided among satellite operators.

“If SES is successful, Intelsat will be obligated to make payment to SES in accordance with the distribution provisions of the amended plan of reorganization,” said Suzanne Ong, vice president of external communications at SES.

SES also agreed to waive its claim for punitive damages as part of the settlement.

A hearing on SES’s request is due to begin on February 7.

Intelsat said it is on track to raise nearly $5 billion in total revenue from clearing C-band spectrum, which the company says will help reduce its debt.

After meeting a key regulatory deadline for releasing part of the spectrumthe operator expects to receive $1.2 billion from this product in January.

Back to growth

Intelsat will emerge as a private company with former bondholders as shareholders under the restructuring plan.

Spengler said PIMCO, an American investment management firm, is expected to be Intelsat’s largest shareholder after bankruptcy with a stake of around 30%.

According to Spengler, who plans to retire shortly after the company’s exit from Chapter 11, the restructuring plan “creates a much different Intelsat with a strong financial foundation and financial flexibility for the future, and it positions us well to fully participate in the market” and invest in “fully defined software”. network based on 5G technology.

Samer Halawi, Executive Vice President and Chief Commercial Officer of Intelsat, discussed the plans for 10 software-defined satellites in October SpaceNews interview.

The company has issued a request for proposals (RFP) for satellites as part of a multi-orbit growth strategy that could also include its own broadband constellation in low Earth orbit.

halawi recently announced his intention to resign from Intelsat at the end of the year.


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