Sea Launch to Receive Additional DIP Financing

February 26, 2010

Sea Launch Company, LLC, will receive a second tranche of debtor-in-possession (DIP) financing from Space Launch Services, LLC (SLS). The $12-million loan agreement, which has received interim approval from the bankruptcy court, will provide funds for Sea Launch to continue operating through the next phase of its reorganization process.

Sea Launch, which provides launch services to the commercial satellite industry, filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on June 22, 2009. On December 3, the company received approval from the U.S. Bankruptcy Court in Delaware on its motion to secure up to $25 million in DIP funding, of which $12.5 million was distributed at that time. The court is expected to give final approval for the second tranche of the funding at a March 17 hearing.

Sea Launch is also discussing provisions for exit financing with SLS, as well as equity investment in a reorganized Sea Launch, to build a strong foundation for transitioning from bankruptcy to a healthy and reliable launch services provider. Sea Launch expects to submit a Plan of Reorganization to the bankruptcy court in the near future, as a step toward emerging from Chapter 11 status in the second quarter of 2010.

“Receipt of our second tranche of DIP financing represents an indication not only of the progress we’re making toward realizing our exit strategy, but also our strong relationship with SLS and their commitment to Sea Launch, for the purpose of sustaining reliable commercial access to space,” said Kjell Karlsen, president and general manager of Sea Launch Company. “All of the elements in this process are coming together in a timely manner. Our customers are also participating in this process, with their discussions for scheduling our launch services.”

A comprehensive plan for a revised and revitalized supply chain management structure is also in its final stages of closure with Sea Launch partner organizations. The new structure is intended to assure timely and cost-effective hardware deliveries and related infrastructure support for launch operations. This element is a significant factor in the company’s emergence and success going forward.