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Satélites Mexicanos, S.A. de C.V. Announces Confirmation of Chapter 11 Plan

11 May 2011

 

Satélites Mexicanos, S.A. de C.V. announced that the U.S. Bankruptcy Court in the District of Delaware has confirmed its prepackaged plan of reorganization (the “Plan”) under Chapter 11 of the U.S. Bankruptcy Code which Satmex filed, together with its subsidiaries, Alterna’ TV Corporation and Alterna’ TV International Corporation, on April 6, 2011. The Plan is purely a balance sheet restructuring, and has no effect on employees or trade creditors As part of the Plan, the issuance of $325 million in principal amount of new 9.5% senior secured notes due 2017 (the “Notes”) was also approved. The Notes were issued at par on May 5, 2011, by Satmex Escrow, S.A. de C.V., a bankruptcy-remote wholly owned subsidiary of Satmex. If certain conditions are satisfied, Satmex Escrow will merge with and into Satmex in connection with the emergence of Satmex and its subsidiaries from Chapter 11, which, as planned, is expected on May 26, 2011.  

 

Upon emergence from Chapter 11, the net proceeds from the offering of the Notes will be used to repay Satmex’s existing First Priority Senior Secured Notes due 2011 and, along with the proceeds of a $96.25 million fully-backstopped rights offering of equity securities to holders of Satmex’s Second Priority Senior Secured Notes due 2013, fund the completion of the Satmex’s Satmex 8 satellite scheduled to be launched in 2012 to replace its Satmex 5 satellite, to purchase 100% of the current equity in Satmex (subject to the satisfaction of certain conditions) and to position Satmex to pursue future growth opportunities.

 

“We believe the reorganization plan and new capital structure will allow Satmex to emerge from Chapter 11 with the financial flexibility necessary to complete the construction and launch of Satmex 8 and realize our substantial growth potential,” said Patricio E. Northland, Satmex Chief Executive Officer. “I want to again extend my appreciation for the support of our employees, business partners and customers, to whom we look forward to continuing to provide the highest quality of fixed satellite services.”