Loral Release
Loral Files Consensual Plan of Reorganization
NEW YORK — March 22, 2005 — Loral Space & Communications Ltd. (OTCBB:
LRLSQ) today filed a revised plan of reorganization (the Plan) with the
Bankruptcy Court.
The Plan, which revises the terms of a plan previously filed on December
5, 2004, reflects an agreement among the company, the Creditors'
Committee and the Ad-Hoc Committee of Space Systems/Loral (SS/L) trade
creditors on the elements of a consensual plan of reorganization. It is
subject to confirmation by the Bankruptcy Court. The Plan provides,
among other things, that:
* Loral's two businesses, satellite manufacturing (New SS/L) and
satellite services (New Skynet), will emerge intact as separate
subsidiaries of reorganized Loral (New Loral).
* New SS/L will emerge debt-free and continue its current
activities, including completion of all satellites under construction or
on order, and active pursuit of additional new awards.
* New Skynet will continue to provide transponder leasing, network
and professional services to current and prospective customers.
* New Loral will emerge as a public company under current
management and will seek listing on a major stock exchange.
* Holders of allowed claims against SS/L and Loral SpaceCom will be
paid in full in cash, including interest from the petition date to the
effective date of the Plan.
* Loral Orion unsecured creditors will receive approximately 80
percent of New Loral common stock and their pro rata share of $200
million of preferred stock to be issued by New Skynet. These creditors
also will be offered the right to subscribe to purchase their pro-rata
share of $120 million in new senior secured notes of New Skynet. This
rights offering will be underwritten by certain Loral Orion creditors
who will receive a fee which may be payable in additional New Skynet notes.
* Loral bondholders and certain other unsecured creditors will
receive approximately 20 percent of the common stock of New Loral.
* Loral's existing common and preferred stock will be cancelled and
no distribution will be made to the holders of such stock.
Implementation of the Plan and the treatment of claims and equity
interests as provided in the Plan are subject to final documentation and
confirmation by the Bankruptcy Court. Loral cannot predict with
certainty when or if confirmation of the Plan will occur.
The Plan will be available today, Tuesday, March 22, 2005, on Loral's
website at www.loral.com. The document also will be available via the
court's website, at www.nysb.uscourts.gov/. Please note that a PACER
password is required to access documents on the Bankruptcy Court's
website. Loral's bankruptcy case number is 03-41710 (RDD).
Loral Space & Communications is a satellite communications company. It
owns and operates a fleet of telecommunications satellites used to
broadcast video entertainment programming, distribute broadband data,
and provide access to Internet services and other value-added
communications services. Loral also is a world-class leader in the
design and manufacture of satellites and satellite systems for
commercial and government applications including direct-to-home
television, broadband communications, wireless telephony, weather
monitoring and air traffic management.
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