PARIS — The new company formed to purchase and operate a long-neglected Lockheed Martin satellite serving Asia hopes to prove its business model within a year and persuade its major investor, a Citigroup affiliate, to provide capital to expand the business, according to the company’s president.

Gregg Daffner, who founded Hong Kong-based Asia Broadcast Satellite (ABS) along with Thomas K. Choi, the venture’s chief executive officer, said the ABS-1 spacecraft, in orbit since 1999 under the name LMI-1, has “perhaps the best location of any satellite, anywhere ” at 75 degrees east longitude.

He said free-to-air television, which is not subject to the same regulatory restrictions as pay television in Asia, is a primary target market for ABS as it builds its business across Asia.

From the 75 degrees east orbital slot, ABS-1’s southern Ku-band beam has a reach that extends from eastern France to the Philippines. Its C-band beams cover most of Africa, all of Asia and Australia.

ABS purchased the satellite from Lockheed Martin Intersputnik, a joint venture between Bethesda, Md.-based Lockheed Martin Corp. and the Moscow-based multinational Intersputnik satellite operator, in the late 1990s.

The Lockheed Martin-backed venture had big ambitions and access to several orbital slots over Asia. But it soon became apparent that the business was outside Lockheed Martin’s core defense focus.

LMI-1 was put up for sale in 2002 and nearly purchased the following year by the Arabsat organization of Riyadh, Saudi Arabia . The sale collapsed following protests from LMI-1 customers that moving the satellite would harm their businesses. They threatened to sue LMI.

With the Arabsat sale no longer a possibility, Lockheed Martin again put the LMI-1 satellite on the market. Daffner said it was in 2004 that the partners in the future ABS venture began talks with Lockheed on a sale.

“It had gotten to the point where customers did not know who to contact to purchase capacity on the satellite,” Daffner said Oct. 11. “I knew Lockheed Martin was selling off its telecom assets and I thought purchasing this satellite would be a good idea.”

Citigroup Venture Capital International of Hong Kong agreed to take a majority stake in the ABS venture, with Asia Debt Management of Hong Kong also taking part in the satellite-purchase financing.

Eric Solberg, a Citigroup Venture Capital International managing director, referred questions about the purchase to ABS. Daffner declined to provide financial details of the transaction but said it is his understanding that ABS bid for the satellite against at least one other company. He also declined to disclose the 2005 revenues generated by the LMI-1 satellite.

Wiley Rein & Fielding provided legal advice to ABS and also supported the company in obtaining export approval from the U.S. State Department.

Brook A. Edinger, an attorney with Wiley Rein, said that while the State Department was familiar with the satellite from the previous attempted sale to Arabsat, approval of the ABS transaction was still complicated because Intersputnik includes the Cuban government as a small shareholder.

The U.S. embargo on Cuba complicates any transaction that includes Cuban presence, even when the deal in question is the sale of an asset and not the purchase of one.

“Our estimates on satellite transactions are that they take between four to six months to win export approval,” Edinger said Oct. 12. “This was a bit more than four months, so it was about average.”

The transaction closed Sept. 15. Daffner said Intersputnik no longer has an ownership stake in the satellite but will remain a sales partner to market ABS-1 capacity in Russia and Central Asia.

ABS-1 is a Lockheed Martin-built A2100 satellite platform with a nominal service life of 15 years. But ABS’s estimates are that, in part because of a highly accurate launch aboard a Russian Proton rocket in September 1999, the satellite has sufficient fuel to operate until 2023.

Daffner said the satellite was less than half filled with customers but that ABS’s business plan foresees it filling up within two years. “We should know within a year whether what we think is true about this market is true,” Daffner said.

The direct-to-home television markets in India and China are not prime targets for ABS, but television programmers offering advertiser-sponsored broadcasts in Asia are likely to be receptive to a satellite able to beam from Europe to the Pacific Ocean, Daffner said.

“If we are right about the market, we would like to turn the 75 degree slot into a hot bird position to build out this neighborhood,” Daffner said, referring to an orbital slot that features several satellites with a large population of television dishes pointed at it. “Citigroup did not participate in this venture as a one-off investment. They are in this to build a business. We want to be a regional consolidator of the market in the Asia-Pacific.”