Intelsat to exit bankruptcy in early 2022

Intelsat, one of the satellite operators involved in the C-band clearing to make way for terrestrial 5G, announced on Thursday that its reorg plan was approved by a U.S. bankruptcy court – a final milestone in its financial restructuring.

It paves the way for Intelsat to start 2022 with a clean slate of sorts, emerging from bankruptcy once all the regulatory approvals are secured.  

The company said its confirmed reorg plan will reduce its debt by more than half – from about $16 billion to $7 billion – and “position the company for long-term success” as it brings new services to market.

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Intelsat filed for bankruptcy protection in May 2020. During the process, the company continued launching new satellites and acquired Gogo’s commercial aviation business for about $400 million.

After all is said and done, Intelsat said it’s set to emerge as a private company, with the support of new equity owners, access to $7.875 billion in capital and a significantly deleveraged balance sheet.

The company expects to receive $4.87 billion in accelerated relocation payments in connection with the C-band spectrum clearing, with $1.2 billion of that total already approved by the Federal Communications Commission (FCC). It expects to receive that in January.

Intelsat was a member of the C-Band Alliance, which initially pushed for a private auction of the 3.7-4.2 GHz spectrum before political forces jettisoned that plan.

Intelsat CEO Stephen Spengler, who plans to retire after the financial restructuring process is completed, said the company will be better positioned to advance its strategic objectives and accelerate its growth trajectory.

“Our goals include building the world’s first global 5G satellite-based, software-defined, unified network,” he said in a statement. “For nearly 60 years, Intelsat has been respected for innovation, reliability, sector leadership, and high-performing services and support. We look forward to maintaining our leading position in the satellite communications industry for decades to come.”