March 17, 2004–Intelsat, Ltd.
today announced that it has completed its acquisition of the North
American satellites and related customer contracts of Loral Space &
Communications Corporation. The $961.1 million purchase enhances
Intelsat’s global market position by adding full coverage of North
America to the Intelsat fleet and expanding its customer base in the
broadcasting, cable television and corporate networking segments.
Upon the closing, Intelsat paid $961.1 million in cash for the
assets acquired under the purchase agreement with Loral. This price
reflects performance-related and other adjustments to the $1.025
billion base purchase price set forth in the asset purchase agreement.
In connection with the closing, and related to the failure last year
of the Telstar 4 satellite, Intelsat was assigned Loral’s rights to
receive insurance proceeds (net of currently expected warranty
payments) of up to $140 million, which would further reduce the total
consideration for these assets.
“The addition of the Loral assets fulfills key strategic
priorities for building our business,” said Conny Kullman, Chief
Executive Officer of Intelsat. “These satellites enhance our worldwide
network coverage and immediately establish us as a serious competitor
in the North American video market.”
Mr. Kullman continued, “Our focus now is on providing a seamless
and efficient transition for all Loral customers that we have
acquired. These assets are an excellent fit with our existing network,
and we expect the transition to move smoothly. With this acquisition
complete, Intelsat is now able to provide reliable, one-stop shopping
for broadcasters or other companies needing to connect from or to
almost any point on Earth.”
In addition to adding prime North American coverage to the
Intelsat fleet, the assets add important Ku-band capacity to serve
Latin America, further enhancing Intelsat’s global, end-to-end
satellite and land-based network.
The four in-orbit satellites and one satellite under construction
that Intelsat has acquired have been renamed as noted below, with the
orbital designation to remain in degrees West. Intelsat has also
acquired rights to use the 77 degrees W orbital location.
Location: New Name: Old Name: In orbit: 97 degrees W Intelsat Americas 5(TM) or IA-5 Telstar 5 or T5 93 degrees W Intelsat Americas 6 or IA-6 Telstar 6 or T6 129 degrees W Intelsat Americas 7 or IA-7 Telstar 7 or T7 121 degrees W Intelsat Americas 13 or IA-13 Telstar 13 or T13 To be launched in the third quarter of 2004: 89 degrees W Intelsat Americas 8 or IA-8 Telstar 8 or T8
Communications operations and customer support will now be managed
by Intelsat, with support from Loral for a six-month transition
period. Command and control of the Intelsat Americas satellites will
be transitioned to Intelsat’s satellite control center over the next
12 to 18 months.
About Intelsat
Building on 40 Years of Leadership. As a global communications
leader with 40 years of experience, Intelsat helps service providers,
broadcasters, corporations and governments deliver information and
entertainment anywhere in the world, instantly, securely and reliably.
Intelsat’s global reach and expanding solutions portfolio enable
customers to enhance their communications networks, venture into new
markets and grow their businesses with confidence. For more
information, visit www.intelsat.com.
Note: Some of the statements in this news release constitute
forward-looking statements that do not directly or exclusively relate
to historical facts, including statements relating to Intelsat’s
ability to provide reliable, one-stop shopping for broadcasters or
other companies needing to connect from or to almost any point on
Earth, Intelsat’s expectation that integration of the assets into its
network will proceed smoothly and Intelsat’s expectations regarding
the timeframe for transitioning command and control of the Intelsat
Americas satellites from Loral to Intelsat. The Private Securities
Litigation Reform Act of 1995 provides a “safe harbor” for certain
forward-looking statements as long as they are identified as
forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual
results to differ materially from the expectations expressed or
implied in the forward-looking statements. When used in this news
release, the words “will,” “expect,” and “believe” and other similar
expressions are intended to identify forward-looking statements. The
forward-looking statements made in this news release reflect
Intelsat’s intentions, plans, expectations, assumptions and beliefs
about future events and are subject to risks, uncertainties and other
factors, many of which are outside of Intelsat’s control. These
factors could cause Intelsat’s actual results to differ materially
from the expectations expressed or implied in the forward-looking
statements and include known and unknown risks. In connection with any
strategic transaction, known risks include, but are not limited to,
the inability to retain and continue to serve successfully customers
gained in connection with the transaction; the inability to execute
integration strategies successfully or to achieve planned synergies or
business goals; and the incurrence of unexpected costs of integration.
Known risks also include, but are not limited to, insufficient market
demand for the services offered by Intelsat; the quality and price of
services offered by Intelsat’s competitors; the risk of delay in
implementing Intelsat’s business strategy; Intelsat’s access to
sufficient capital to meet its operating and financing needs; changes
in laws and regulations; political, economic and legal conditions in
the markets Intelsat is targeting for communications services or in
which Intelsat operates; general economic conditions; and a change in
the health of Intelsat’s satellites or a catastrophic loss occurring
during the in-orbit operations of any of Intelsat’s satellites. More
detailed information about known risks is included in Intelsat’s
annual report on Form 20-F for the year ended December 31, 2003 on
file with the U.S. Securities and Exchange Commission. Because actual
results could differ materially from Intelsat’s intentions, plans,
expectations, assumptions and beliefs about the future, you are urged
to view all forward-looking statements made in this news release with
caution. Intelsat does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Intelsat/Loral Transaction Summary
Structure:
Closing of acquisition of the North American satellite assets of
Loral Space & Communications Corporation and certain of its
affiliates.
Strategy:
The Intelsat fleet now expands to 27 owned satellites worldwide
and the transaction increases our customer base in the cable
television and broadcasting segments. This acquisition complements
Intelsat’s pre-acquisition network of 23 owned satellites, the
Intelsat 10-02 under construction and leased capacity on two
additional satellites, by adding four operational satellites, one
satellite under construction and six orbital locations that cover the
key North American market. We believe that the closing of this
transaction will further our strategy of maintaining a global
leadership position in a consolidating marketplace for satellite
operators.
Purchase price:
$961.1 million, which does not reflect expected insurance proceeds
(net of currently expected warranty payments) of up to $140 million
for the Telstar 4 loss.
Future Satellite Agreement:
In addition, Intelsat paid a deposit of $50 million to SS/L for
the purchase of a future satellite.
Assets:
Four operational satellites providing North American coverage, one
satellite currently under construction, and the rights to six North
American orbital locations.
Name Old name Location
Intelsat Americas 5(TM) or IA-5 Telstar 5 or T5 97 degrees W
Intelsat Americas 6 or IA-6 Telstar 6 or T6 93 degrees W
Intelsat Americas 7 or IA-7 Telstar 7 or T7 129 degrees W
Intelsat Americas 13 or IA-13 Telstar 13 or T13 121 degrees W
(1)Intelsat Americas 8 or IA-8 Telstar 8 or T8 89 degrees W
(2) ----------- -------- 77 degrees W
(1) IA-8 is expected to launch in Q3 2004 and will carry a
high-power Ku- and C-Band payload.
(2) Available slot for future satellite.
- Currently carry traffic for premiere broadcasters, cable
television operators and corporate network providers. - Estimated weighted average remaining orbital maneuver life of
16.6 years as of March 1, 2004.
Financing:
Citigroup Global Markets Inc., BNP Paribas Securities Corp. and
Morgan Stanley & Co. Incorporated acted as initial purchasers of $400
million in five-year senior notes and $700 million in 10-year senior
notes issued in November 2003. Proceeds from the issuance of the
senior notes were used to finance the purchase price for the Loral
assets.
Contact:
Intelsat, Ltd.
Investor Relations and Financial Media:
Dianne VanBeber, 202-944-7406
dianne.vanbeber@intelsat.com
or
General Media:
Susan Gordon, 202-944-6890
susan.gordon@intelsat.com
