Intelsat files for Chapter 11 protection to restructure debt

News Video United States 14 MAY 2020
Intelsat files for Chapter 11 protection to restructure debt

Intelsat has filed for Chapter 11 bankruptcy protection in the US in order to restructure its debt. The company said it needs to free up cash in order to start on clearing its C band spectrum in the US for 5G and qualify for the associated transition payments. 

The process started at the bankruptcy court in eastern Virginia where the company is based will not affect the company's day-to-day operations, nor is its government and military unit Intelsat General (IGC) included in the process. No changes to the company’s operations or workforce are planned, and Intelsat said it will continue to launch satellites, invest in systems and provide services to customers.

Intelsat has arranged USD 1 billion in new financing to complement its cash on hand and positive cash flow during the restructuring process. The company said the procedure should result in lower overall debt and a stronger balance sheet when it emerges from Chapter 11. The group ended 2019 with net debt of around USD 13.8 billion, equal to more than nine times annual EBITDA, while interest payments passed over USD 300 million per quarter. 

The company estimates it needs to spend over USD 1 billion on the C-band work. In order to meet the FCC's timetable and be eligible for around USD 4.7 billion in compensation, Intelsat said it needs start immediately on clearing the spectrum and incur upfront costs. It's also managing the economic slowdown impacting several of its end markets caused by the Covid-19 global health crisis, the company noted. 

Categories:

Satellite

Companies:

Intelsat

Regions:

Global

Countries:

United States

Tags:

Bankruptcy - Insolvency, Finance

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