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Intelsat Wins Bid for Loral N. American Satellites

October 21, 2003|From Bloomberg News

Loral Space & Communications Ltd., a satellite maker that filed for bankruptcy protection in July, said Monday that Intelsat Ltd.'s $1.1-billion bid for its six North American telecommunications satellites was the highest at auction.

The bid, beating out that of EchoStar Communications Corp., is subject to approval by the U.S. Bankruptcy Court in New York at a hearing Wednesday.

Littleton, Colo.-based EchoStar came in slightly under Intelsat with a $1.03-billion bid, said Loral Chief Executive Bernard Schwartz.

New York-based Loral, the third-largest U.S. satellite maker after Boeing Co. and Lockheed Martin Corp., filed for Chapter 11 in July after amassing more than $3 billion in debt. It hasn't had a profit since 1997, because of the biggest slump in satellite orders in industry history. Loral this month rejected a $1.85-billion offer from EchoStar to buy all of its assets.

"I think the court will recognize the value" of the Intelsat bid, Schwartz said. "We executed prudent judgment in making that contract, and that is the test the court will use in determining whether this contract should be approved."

Loral wants to keep five satellites plus its manufacturing businesses and sell only its North American satellites as part of its Chapter 11 reorganization. In September, Bankruptcy Judge Robert Drain denied EchoStar's request to delay the auction of six satellites and set an Oct. 15 deadline for bids.

EchoStar said that it was disappointed it lost the auction but that its $1.85-billion offer for all of Loral's assets remained "on the table."

Of the six satellites auctioned, five are in orbit and one, Telstar 8, will launch in the first half of next year, Loral said.

Intelsat separately agreed to buy a new satellite from Loral under a contract worth more than $100 million, Schwartz said.

Loral shares rose 2 cents to 45 cents in over-the-counter trading.

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