Satmex Signs Comprehensive Restructuring Agreement With Stakeholders
Plan Is To Be Implemented In Mexico And In U.S. With Support Of Mexican
Government
Satmex Signs Comprehensive Restructuring Agreement With Stakeholders
MEXICO CITY, April 13 /PRNewswire/ -- Satelites Mexicanos, S.A. de C.V.
("Satmex" or the "Company"), Mexico's leading satellite service
provider, announced today that, together with the holders of a majority
of its Senior Secured Floating Rate Notes due 2004 (the "FRNs") and
holders of more than two-thirds of its 10 1/8 percent Senior Notes due
2004 (the "HYBs" and, collectively with the FRNs, the "Creditors"), it
has entered into a comprehensive agreement to restructure its existing
indebtedness and re-align its capital structure. The FRNs include funds
managed by GoldenTree Asset Management, L.P. and Murray Capital
Management, Inc., among others. The HYBs include funds managed by
Gramercy Advisors LLC, Harbinger Capital Partners and Federated
Investment Management Co. The current majority shareholders of the
Company, Principia S.A. de C.V. ("Principia"), controlled by Sergio
Autrey, and Loral Space & Communications, Inc. ("Loral"), also joined in
the restructuring agreement. The agreement memorializes a stand-alone
restructuring of Satmex on the principal terms first announced by the
Company on February 6, 2006.
Thomas Heather, the Conciliador in the Company's pending Concurso
Mercantil proceeding, who was appointed at the request of Mexico's
Ministry of Communications and Transportation, said, "The execution of
this agreement, which is the product of a massive effort by all parties
concerned, resolves numerous implementation issues and provides a clear
blueprint for effectuating the successful restructuring of Satmex." The
agreement calls for the filing of a restructuring plan with the Mexican
court where the Company's Concurso Mercantil proceeding is pending,
which, in turn, will provide for the final implementation of the
restructuring through a pre-negotiated bankruptcy plan under chapter 11
of the U.S. Bankruptcy Code. Mr. Heather further stated that the
restructuring plan has the full support of the Mexican Government, and
reiterated that all applicable governmental approvals necessary to
complete the restructuring plan, including those of the Ministry of
Communications and Transportation, are expected to be issued in due
course and in a timely manner.
Sergio Autrey, chairman and CEO of Satmex, also confirmed that the
launch of the Company's new Satmex 6 satellite in May of this year is
proceeding on schedule, stating, "Together with the restructuring of our
indebtedness, the launch of Satmex 6 will enhance our financial
stability and enable us to continue delivering our premier satellite
services to our customer base for many years to come." Mr. Autrey
further stated that Satmex's sales force is actively marketing the
available transponder capacity on Satmex 6.
Richard Mastoloni, vice president and treasurer of Loral Space &
Communications, said, "Loral's participation in the restructuring
process confirms our commitment to restoring the economic viability of
Satmex." He also said, "Space Systems/Loral and Satmex are currently
working hard preparing for the upcoming launch in May of the Space
Systems/Loral-built Satmex 6 satellite. Satmex 6 will be one of the
region's largest and most powerful satellites that will provide
high-demand C- and Ku-band coverage of the entire Western hemisphere."
Mr. Autrey noted that consummation of the restructuring will satisfy all
obligations of Satmex's holding company, Servicios Corporativos
Satelitales, S.A. de C.V. ("Servicios"), under its Menoscabo obligation
to the Mexican Government. Servicios is itself subject to a separate
Concurso Mercantil proceeding, under which, as part of the contemplated
restructuring plan, the Mexican Government will receive the economic
benefit derived from any future sale of the shares in Satmex retained by
Servicios in full satisfaction of the Menoscabo obligation.
The obligations of the parties to support the restructuring are subject
to a number of timing and other conditions, including the receipt of
necessary governmental regulatory and judicial approvals and the
acceptance of the restructuring by at least two-thirds of the FRNs, and
there can be no assurance that all such conditions will be satisfied.
Parties to the agreement will have rights of termination in the event
such conditions are not satisfied or certain other events should occur.
As part of the restructuring, holders of the existing U.S. $203.4
million of FRNs will receive, in full satisfaction of the obligations
due under the FRNs, new first priority senior secured notes ("First
Priority Senior Secured Notes") on the following terms:
- Principal amount equal to the sum of current principal and accrued
interest on the FRNs through the effective date of the restructuring.
Assuming an effective date of September 30, 2006, the principal amount
will be $234.4 million and will be adjusted, upward or downward, at a
rate of one month LIBOR + 450 basis points divided by three hundred and
sixty, for each day before or after September 30, 2006 that the
effective date occurs;
- Five (5) year maturity with a monthly or quarterly coupon of LIBOR
+ 875
basis points;
- Callable at a price of 103 in year 1, 102 in year 2, 101 in year 3, and
at par (plus accrued interest) thereafter;
- First priority security interest in all of Satmex's assets;
- Cash sweep prepayments on any cash balances over U.S. $5 million; and
- Change of control put option at 101 (plus accrued interest).
Holders of the existing U.S. $320 million of HYBs will receive, in full
satisfaction of the obligations due under the HYBs including all accrued
interest, new second priority senior secured notes ("Second Priority
Senior Secured Notes") in the principal amount of U.S. $140,000,000 and
certain shares of reorganized Satmex, on the following terms:
- Seven (7) year maturity with a quarterly coupon of 10 1/8 percent per
annum, [with 0 percent cash pay and 10 1/8 percent payable in kind in
year 1 and 2 percent cash pay and 8 1/8 percent payable in kind
thereafter until the First Priority Senior Secured Notes are paid in
full, after which time the coupon shall be paid wholly in cash;
- Second priority security interest in all of Satmex's assets, junior in
priority, operation and effect to the security interests of the First
Priority Senior Secured Notes;
- After the full payment of the First Priority Senior Secured Notes, cash
sweep prepayments on any cash balances over U.S. $5 million; and
- Change of control put option at par (plus accrued interest), unless
waived by holders of 66-2/3 percent of the Second Priority Senior
Secured Notes or unless following the change of control Satmex is
controlled by certain approved buyers.
In exchange for capitalization of the balance of their claim of
approximately U.S. $274 million in principal and unpaid interest, the
holders of the HYBs will receive 78 percent of the economic interest in
the equity of Satmex including 43 percent of the voting shares and the
by laws of Satmex will include certain governance rights for the benefit
of the holders of such equity ("Bondholder Equity").
The remaining economic equity of Satmex will be held by Satmex's current
shareholders, 2 percent by Principia and Loral, and 20 percent by
Servicios and the Mexican Government. However, the economic benefit
derived from any future sale of the shares in Satmex retained by
Servicios will be paid to the Mexican Government in satisfaction of
Servicios' Menoscabo obligation. The majority voting shares of Satmex
will be owned by Servicios and the Mexican Government. The Board of
Directors of reorganized Satmex will consist of seven persons, four
independent persons approved by Servicios and the Mexican Government,
one person appointed by Principia and Loral, and two persons appointed
by the HYBs.
All of the shares of Satmex, including Bondholder Equity and those
shares held by Satmex's current shareholders and the Mexican Government,
will be transferred to a Mexican equity trust for the purpose of
facilitating a potential sale of 100 percent of the equity of Satmex.
The governance of the trust will be charged with effecting a sale of
Satmex in an orderly process following the consummation of the
restructuring, based on specified criteria and at certain specified
times in the future.
Subject to the satisfaction of the conditions described above, the
Company anticipates that the restructuring will be consummated by the
fourth quarter of 2006.
Satmex may issue further information regarding the restructuring
agreement and the status of the restructuring in the future.
Holders of FRNs should contact the advisors to the ad hoc committee of
FRNs, Mitchell A. Harwood of Mitchell A. Harwood Partners, LLC at (917)
670- 4777 and Dennis L. Jenkins of Wilmer Cutler Pickering Hale and Dorr
LLP at (617) 526-6491.
Holders of HYBs should contact the advisors to the ad hoc committee of
HYBs, Michael Seery of Chanin Capital Partners at (212) 758-2629 and
Steven Scheinman of Akin Gump Strauss Hauer & Feld LLP at (212) 872-1000.
http://www.satmex.com/
Website: http://www.satmex.com/
--
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