Intelsat wipes out $9bn debt as it emerges from bankruptcy
Satellite operator Intelsat has emerged from bankruptcy with its debt cut from US$16 billion to $7 billion, and with $6.7 billion in new finance.
The move comes 21 months after the company – with a history that dates back more than 60 years – went into Chapter 11 protection under US bankruptcy laws.
The biggest new shareholder, with 32.8%, is Pacific Investment Management Company (Pimco), whose ultimate parent, according to the Federal Communications Commission (FCC), is Allianz SE, a Munich financial services company.
Shares in the new Intelsat – which is registered in Luxembourg – will be traded on the over-the-counter (OTC) market.
The new shareholders have put in place a new board of directors, chaired by Lisa Hammitt (pictured) and including CEO Stephen Spengler.
Hammitt is a computer scientist with a track record at IBM – where she led strategy in artificial intelligence (AI) and later ran its Watson venture. Until 2020 she was global VP of data and AI at Visa, the financial services company.
As well as chairing Intelsat, Hammitt chairs the board of Beseeq, described as an AI-driven start-up that focuses on advertising.
Spengler is expected to retire from his role following the emergence from bankruptcy, with a cash and share payment reported to be at least $4 million, on top of 2020 benefits said to be worth $100 million.
He said last night in a message to vendors that “trade creditors who have valid, undisputed claims of $1 million or less for goods received or services rendered prior to the commencement of the process against any of the Intelsat debtor entities will be paid in full in cash”.
He said the “significantly deleveraged balance sheet” –in other words, with many debts eradicated by the Chapter 11 process – “and the support of new equity owners, we are driving our business forward from a position of great strength”.
Spengler said, in a message to all on Intelsat’s emergence from bankruptcy, “we have significantly less debt as well as new financing to support our innovation and network plans, complementing our unparalleled global orbital and spectrum rights and strong operating model”.
He said Intelsat is “positioned better than ever to fuel the success of our customers and partners, achieve our strategic objectives, and accelerate our growth”.
In January 2022 the company announced plans to build two software-defined satellites, to be built by Thales Alenia, that are scheduled to be in service in 2025. They will join two Airbus constructed software-defined satellites, announced in January 2021.