Busy bankruptcy court for Intelsat
June 11, 2020
As well as approving a $1 billion ‘debtor in possession’ loan, Intelsat’s bankruptcy court had an extremely busy ‘omnibus’ day on June 9th dealing with dozens of applications and motions.
The court approved the rate of interest that Intelsat must pay to the lenders Credit Suisse on the $1 billion loan. Intelsat has to pay an immediate 1.5 per cent, and then an expensive 3.6 per cent (the ‘ticking fee’) per month just like a taxicab fare and designed to encourage Intelsat not to stretch the whole bankruptcy process out too long.
While the $1 billion loan grabbed the most headlines, the court also agreed a motion that – in essence – permits the sale of Spaceflight Industries, in which Intelsat has a $50 million loan, to Mitsui & Co. Intelsat had made the loan to Spaceflight because it wanted to participate in a Spaceflight subsidiary (BlackSky, which is an Earth observation business). Intelsat still has a “right to purchase” option in Spaceflight/BlackSky.
BlackSky wants to launch 60 satellites overall. It already has four craft in orbit and plans to launch another four craft on June 24th.
Also in front of the court was the matter of Intelsat and the complaints made by the International Telecommunications Satellite Organisation (ITSO), which supervises Intelsat’s public service obligations. ITSO wanted the court to order Intelsat pay up cash to fund its activities. Some of the ITSO claims are denied by Intelsat which says that ITSO’s obligations do not extend – for example – to funding expensive trips to Davos and the World Economic Forum as well as other unwarranted expenses.
The court delayed a decision on ITSO until its next ‘omnibus’ hearing on June 30th.