Friday March 13, 4:02 pm Eastern Time
Company Press Release
SOURCE: COMSAT Corporation
COMSAT Pleased With Inmarsat Plan to Privatize Organization
Plan Would Privatize Inmarsat by January 1, 1999; Public Offering Planned Within
Approximately Two Years of That Date
BETHESDA, Md., March 13 /PRNewswire/ -- COMSAT Corporation (NYSE: CQ - news) said today that it is pleased
with the Inmarsat Council's plan to privatize Inmarsat. The Council, which met this week, will present its plan for approval by
member governments at an Assembly of Parties meeting in April 1998.
''This agreement is an important strategic milestone for COMSAT,'' said Betty C. Alewine, president and chief executive
officer of COMSAT Corporation. ''The action plan developed by the Inmarsat Council is an excellent road map for the
formation of a private company from Inmarsat's assets by January 1, 1999. A public offering is planned within approximately
two years of that date.''
The privatization timetable is contingent on Inmarsat member governments agreeing to implement the proposed amendments to
the Inmarsat Convention. If such agreement is not achieved, the ratification process could take longer. ''If agreed, however,
the transformation of Inmarsat into a private company and its subsequent public offering will create, for the first time, a tangible
market valuation for these assets,'' Alewine continued.
An investment banker, SBC Warburg Dillon Read (SBC), has been hired by the Council to provide financial and strategic
advice, due diligence and review of Inmarsat's business plans with a view toward the privatized organization's ability to raise
capital in public markets.
COMSAT will be a shareholder and board member of the new private company and will continue to provide services to its
customers using the Inmarsat system through its four land earth stations. Although ownership in the company is planned to be
capped at 15%, COMSAT's current 22% ownership in Inmarsat will be grandfathered. Prior to the public offering, owners
will be able to trade shares, and strategic investors will be able to invest up to $500 million in equity in the private company.
''This plan also addresses many of the policy goals of the U.S. Government,'' said Alewine. ''The privatization of Inmarsat will
be pro- competitive, pro-consumer and will preserve the value of COMSAT's shareholders' investment in Inmarsat since its
founding.''
If the privatization is approved, COMSAT would change its accounting for its Inmarsat investment from consolidation to the
equity method. Other financial details, including Inmarsat dividend policy prior to its public offering, will be determined at
subsequent Council meetings.
Some of the statements in this news release are forward looking. Forward looking statements are based on COMSAT
management's current expectations and assumptions, which may be affected by the timing and outcome of pending regulatory,
legislative and Inmarsat actions and by subsequent developments and business conditions, and necessarily involve risks and
uncertainties. Therefore, there can be no assurance that actual results will not differ materially from anticipated results. Readers
should refer to COMSAT's disclosure documents filed with the Securities and Exchange Commission, including the
corporation's 1996 Form 1O-K and the Form 1O-Q for the first, second and third quarters of 1997 for specific details on
some of the factors that may affect operating results.
COMSAT Corporation is a global provider of satellite services and digital networking services and technology.
SOURCE: COMSAT Corporation |
