Intelsat looks to eliminate $10bn of debt
November 11, 2020
Intelsat is currently working its way through its Chapter 11 bankruptcy reorganisation. Prior to the declaration of bankruptcy, the company’s debt burden was some $15.2 billion.
It was massively weighed down by interest payments on that debt, costing the company more than $200 million per quarter-year. Intelsat says it is looking to mitigate a major portion of that debt amounting to some $10.2 billion and is working with various appointees of the unsecured creditors to find solutions.
However, one major item of news emerged last week when Intelsat agreed the SES request to extend to December 4th the time allowed for SES to respond to Intelsat’s counter-statement on the serious legal dispute between the pair. SES is claiming $1.8 billion from Intelsat that is based on an alleged breach of fiduciary duty and which was wrapped up in the C-band process when both parties were involved in the C-Band Alliance.
Intelsat has already responded robustly to the SES allegations. In a 101-page filing to its bankruptcy court on October 19th Intelsat fully rebutted the SES claim, saying it was an “astounding – and obviously inflated” action based on “meritless theories of breach of contract, breach of fiduciary duty, and unjust enrichment.” Intelsat says that SES deliberately misled the FCC in distorting an examination of the two businesses C-band coverage and operations over the US in order to gain a greater share of the FCC’s compensation payments for giving up their spectrum. Intelsat claims that the SES tactic worked. Intelsat has asked for the SES claim to be rejected by the court in full.