BERMUDA: Intelsat, the global satellite communications leader, has announced that it has signed a $ one billion definitive asset purchase agreement with Loral Space & Communications Corporation for six satellites and the rights to their orbital locations.
The proposed acquisition of the Loral assets would complement Intelsat's global network, which includes capacity on 26 satellites, by adding complete coverage of the North American market and by increasing Intelsat's customer base in the cable television and broadcasting segments, says a company release. The total consideration for the assets may increase or decrease based on business performance and as provided for in the agreement.
Of the six satellites to be purchased, four are operational, serving cable television, broadcast and private data network customers in North America. Two satellites are currently under construction and are scheduled to be launched into North American orbital locations in the coming year. Intelsat would assume responsibility for launch and insurance-related costs for one of the satellites currently under construction and would make a $100 million secured down payment on a future satellite to be built by Space Systems/Loral to Intelsat's specifications.
Intelsat CEO Conny Kullman has been quoted in an official release saying, "Intelsat has been pursuing a focused strategy that includes seeking strategic transactions that enhance Intelsat's service application mix and geographic coverage. This transaction, if consummated, meets both of these objectives and enhances our position as a global leader in the fixed satellite services sector. The transaction would provide Intelsat a North American franchise that, given the scarcity of orbital locations, is virtually impossible to build on an organic basis and can be quickly integrated into our business.
The assets to be purchased include the Telstar 4, Telstar 5, Telstar 6 and Telstar 7 satellites, which today provide North American coverage from the 89°W, 97°W, 93°W, and 129°W orbital locations. The agreement also includes two satellites currently under construction, Telstar 8 and Telstar 13. The Telstar 13 satellite, co-owned with EchoStar Communications Corporation, is expected to launch in early August and will be located at the 121°W orbital location.
The Telstar 8 satellite is scheduled to launch into the 89°W orbital location early next year, at which time Telstar 4 will move to 77°W. The in-orbit satellites to be acquired currently carry traffic for premiere broadcasters, cable operators and private data network operators, such as CBS and Fox Broadcasting, and have a contracted backlog of approximately $550 million. Collectively, the satellites have an average remaining orbital maneuver life of 13.7 years.