Intelsat, currently in Chapter 11 bankruptcy reconstruction, is asking its bankruptcy court to formally approve two new satellites for broadband In-Flight Connectivity. The craft are needed following on from its $500 million purchase last year of the commercial aviation assets of Gogo.
Intelsat wants to order the pair of satellites from Airbus Defence & Space according to a filing made with the bankruptcy court on December 31st.
However, time is of the essence. Intelsat signed the purchase contracts (“the SD Satellite Contract”) on December 31st but has to make the initial “milestone” down payments to secure the contract terms. This means that the deposits must be paid by January 8th. Intelsat has a hearing with the Court on January 7th.
This timetable comes about because an earlier request to the court (on Nov 9 2020) covering three satellites was withdrawn with Intelsat saying it wanted more time to negotiate with the potential suppliers.
This extra time has resulted in the 3-satellite plan being reduced to two satellites. The court filing says: “[Intelsat] believes that entry into the SD Satellite Contract is within the ordinary course of business, and therefore is permitted without further court order by section 363(c) of the Bankruptcy Code. Entry into the SD Satellite Contract alternatively is clearly a proper exercise of the Debtors’ sound business judgment and value-maximizing for their estates.”