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.