Mexican satellite-fleet operator Satmex expects to issue bid requests this year for a large C- and Ku-band telecommunications satellite, called Satmex 7, on the assumption that its just-launched Satmex 6 spacecraft will win substantial new business in the United States and South America.
Satmex officials said the company’s plans also assume that a debt-restructuring agreement the company reached with its creditors in April will pass muster with both Mexican and U.S. bankruptcy-court authorities.
For Satelites Mexicanos S.A. de C.V., the May 27 launch of the Satmex 6 spacecraft represents the company’s emergence from a long, dark tunnel.
“The message we are sending is that we are back, that we have a stable business and are ready to grow,” said Sergio Autrey, Satmex’s chief executive.
Roberto E. Betancourt, Satmex executive director for satellite programs, said Satmex has an RFI, or request for information, document ready to be sent to prospective manufacturers for Satmex 7 once Satmex 6 is in final orbital position at its 113 degrees west orbital slot.
Betancourt said Satmex 7 likely would feature 24 C- and 24 Ku-band transponders, with Ku-band spot beams planned to permit the reuse of Ku-band radio spectrum. The company would expect a 29-month period from contract signature to launch date, Betancourt said.
Weighing 5,460 kilograms at launch and carrying 36 C-band and 24 Ku-band transponders, Satmex 6 was one of the world’s largest commercial telecommunications satellites when it was ordered in late 2000 from manufacturer Space Systems/Loral of Palo Alto, Calif.
But as the satellite was nearing completion, Satmex was being squeezed by unsustainable debt payments and a poor South American market for leasing transponders.
The company defaulted on bond payments and by late 2003, with its three-satellite fleet needing replenishment, Satmex had enough cash on hand to send Satmex 6 to Europe’s spaceport here, but not enough to finance the Ariane 5 rocket launch and the related insurance.
Satmex 6 was shuffled among several storage areas while creditors in New York and Mexico City argued over whether Satmex should file for U.S.-style bankruptcy or for the Mexican version of Chapter 11 bankruptcy protection, called Concurso Mercantil.
The Mexican government, a Satmex shareholder and an indirect creditor, insisted on Mexican proceedings. Satmex shareholder Loral Space and Communications of New York, which owns Space Systems/Loral, also had claims against Satmex, which in turn had counterclaims against Loral.
After two years in storage, Satmex 6 was returned to Loral in late 2005 following an agreement between Satmex and Loral that includes Loral’s ownership of two C-band and two Ku-band transponders on Satmex 6. Loral spent about two months re-testing the satellite before shipping it back to the spaceport to await an Ariane 5 launch date.
Mexico’s Ministry of Communications appointed Thomas Heather, a partner in law firm White & Case’s Mexico City office, as mediator between Satmex and its creditors.
The new Satmex ownership will be 78 percent owned by its bondholders, including several U.S. private equity companies; 20 percent by the Mexican government; and 2 percent by Loral and the Servicios holding company of Mexico. Servicios’ own financial troubles — its creditor is the Mexican government — and the pending Servicios bankruptcy proceedings in Mexico were one of the reasons the Satmex situation took so long to resolve, according to Satmex and its creditors.
All of Satmex’s equity is to be transferred to a Mexican equity trust for eventual sale. Autrey said prospective buyers could include Satmex competitors or other satellite-fleet operators but that the Mexican government will retain 51 percent of the voting rights in the company.
It remains unclear when the equity trust will attempt to sell Satmex’s shares, as the success of Satmex 6 in North and South America in the coming months could dramatically improve the company’s attractiveness.
A New York bankruptcy court also will review the financial restructuring agreed to in Mexico, but Autrey said this is not expected to delay the completion of Satmex’s restructuring by late 2006 . At that point, he said, the company will be free to order Satmex 7.
In addition to the new Satmex 6, Satmex operates two telecommunications satellites, Solidaridad 2 and Satmex 5, expected to remain in service until 2010 and 2014, respectively.