PARIS — Loral Space and Communications has made a $6.5 million cash payment to MDA of Canada to compensate MDA for the loss of future orbital-incentive payments from a satellite built by Space Systems/Loral, which Loral sold to MDA in November, Loral said.

The Intelsat IS-19 satellite, launched in June 2012, suffered a partial loss of capacity when one of its solar arrays did not fully deploy. As is common in satellite contracts, Luxembourg- and Washington-based Intelsat had withheld a portion of the payment due Space Systems/Loral as orbital incentives.

Orbital incentives typically amount to 10 percent of a satellite’s contract price. They are paid out annually, with interest, by the satellite’s owner for the spacecraft’s scheduled 15 years of in-orbit service. A manufacturing defect discovered at any time during this period can reduce future orbital incentive payments.

Intelsat has received an $85 million insurance claim as a result of the solar array defect.

In a May 9 filing with the U.S. Securities and Exchange Commission, New York-based Loral said the IS-19 contract included $18 million in orbital incentives that would have accrued to MDA in the coming years.

The solar array deployment failure has reduced those expected payments by $6.5 million, resulting in the cash payment from Loral to MDA, Loral said. Any further reductions in the IS-19 incentive payments resulting from satellite defects discovered before Nov. 2 will result in corresponding additional Loral payments to MDA, Loral said.


Spate of Solar-array Failures on SS/L Satellites Traced to Manufacturing Defect

IS-19 Damage Probe Focuses on Satellite

Intelsat’s IS-19 Satellite Sustained Permanent Damage to Solar Array

Two Loral Satellites Cleared To Launch After IS-19 Problems

Probe of Intelsat Solar Array Glitch Focuses on Launch Vehicle

Peter B. de Selding was the Paris Bureau Chief for SpaceNews.