Satellite company Intelsat said last week it’s undertaken a financial restructuring. Intelsat and some subsidiaries have filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. According to a press release, this decision will position the company for long-term success.
“This is a transformational moment in the history of our company,” said Intelsat CEO Stephen Spengler. “Intelsat is the pioneer and foundational architect of the satellite industry. For more than 50 years, we have been respected for quality, innovation, sector leadership, and premium services.”
The restructuring process will enhance Intelsat’s liquidity, reduce its legacy debt burden, and enable future growth plans. Intelsat has secured a commitment for $1 billion of new financing, subject to Court approval.
One reason for the restructuring is so Intelsat can participate in the FCC’s accelerated clearing of C-band spectrum in support of the 5G rollout. Under the clearing guidelines, Intelsat needs to spend more than $1 billion on clearing activities to gain eligibility to receive $4.87 billion of accelerated relocation payments.
Spengler added, “We intend to move forward with the accelerated clearing of C-band spectrum in the United States and to achieve a comprehensive solution that would result in a stronger balance sheet. This will position us to invest and pursue our strategic growth objectives, build on our strengths, and serve the mission-critical needs of our customers with additional resources and wind in our sails.”
According to the press release, Intelsat is also managing the economic slowdown caused by the COVID-19 pandemic. Amidst the restructuring, no changes to the company’s operations or workforce are planned. Intelsat has filed a series of customary motions seeking to maintain business-as-usual operations and uphold its commitments to its stakeholders to facilitate a smooth transition.
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