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Intelsat denies Chapter 11 plan

February 23, 2016

By Chris Forrester

Intelsat had another bad day on the stock market February 22nd, with its share price falling 9.6 per cent to just $2.72 (and at one point it hit an all-time low of $2.54) and a market capitalisation of below $300 million.

Market sentiment was influenced by Intelsat saying that it had appointed Guggenheim Securities to examine “financing and balance-sheet initiatives” although at the same time stressing that this was not a precursor to a merger or acquisition, or a Chapter 11 bankruptcy move.

Intelsat’s debt burden is a massive $14.6 billion, which almost certainly eliminates any prospect of someone buying the business. Also not helping is CFO Jacques Kerrest’s 2016 guidance for analysts saying that revenues would likely fall another 8 per cent this year (to about $2.14 billion, down from 2015’s $2.35 billion) despite adding 3 new satellites into orbit this year.

Kerrest added that it would also be taking an accounting hit in the form of what he called an “impairment charge” of up to $6.8 billion which would better reflect a decline in intangible assets since 2008, when the business was bought by a consortium led by BC Partners.

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