Intelsat files revised Reorganisation Plan

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Intelsat’s lawyers filed a revised Reorganisation Plan from its Chapter 11 bankruptcy into the court on November 19th.

Intelsat and its associated businesses have debts of some $15 billion that it is seeking to halve. While this is a considerable sum it is modest when compared to the likes of Enron’s bankruptcy ($63 billion back in 2001) or $41 billion for WorldCom in 2002.

Running at a mere 2080 pages in total the Intelsat document is nothing if not thorough. It is now subject to approval by the bankruptcy court and will be tested and challenged by a number of objecting parties.

The plan explains how, if approved, certain claims, debts and priority obligations will be handled post-bankruptcy and how Intelsat’s various sister companies and businesses will take care of their obligations.

If the plan is approved then Intelsat will immediately restructure and issue new Common Stock and some debtors will receive shares from this issue. Intelsat will borrow cash against new Warrants and similar securities and establish a new capital structure of $7.125 billion.

The Confirmation Hearing is scheduled to start on December 2nd with the bondholders seeking to approve the plan by December 22nd.

However, whether or not the plan is approved there is at least one other major – and highly contentious – hurdle for Intelsat which is the claim by SES for a greater share of the FCC’s C-band incentive payments. That will not be heard by the court until the New Year and, as yet, no date has been fixed.


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