Press Release Source: Loral Space & Communications
Loral and APT Satellite Agree to Joint Ownership of APSTAR-V Satellite
Monday September 23, 8:18 am ET
NEW YORK--(BUSINESS WIRE)--Sept. 23, 2002--Loral Space & Communications (NYSE: LOR - News) today announced that through its Loral Orion subsidiary it has agreed with APT Satellite Company Limited, Hong Kong (APT), to participate on a 50-50 basis in the ownership of the APSTAR-V satellite scheduled to enter service in the third quarter of 2003.
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Loral's capacity on the satellite will be designated Telstar 14.
Under manufacture by Space Systems/Loral, APSTAR-V is a high-powered C/Ku-band hybrid satellite based on SS/L's 1300 platform. The new spacecraft will operate a total of 54 transponders, 38 C-band and 16 Ku-band at 138 degrees East longitude. APSTAR-V will provide Ku-band voice, video and data services to China, India and East Asia, and broadbeam C-band services throughout the Asia-Pacific region, including Australia and Hawaii. The new satellite also will be used to carry entertainment and multimedia services for the main cities of Asia to and from the U.S. through Hawaii.
The purchase price of $115 million, representing half of the total cost of the satellite in orbit, for Loral's 50% interest in the satellite (19 C-band and 8 Ku-band transponders) will be paid in increments through 2008. $57.5 million will be paid prior to launch and funded primarily from the liquidation of existing launch deposits, as well as cash on hand. The second $57.5 million will be paid in increments ramping from $10 million to $17 million annually beginning in the fourth quarter of 2005.
This payment schedule is designed to coincide with the anticipated utilization on the satellite. Further, this transaction does not change Loral's projected cash and capital expenditure plans through 2004.
To ensure a timely launch of APSTAR-V in 2003, Loral and APT have agreed that, if a U.S. license to launch the satellite on board a Chinese Long March rocket has not been secured by September 30, 2002, a Western launch provider will be used.
"This is a low-risk opportunity for Loral to add attractive capacity over time, at very favorable terms," said Bernard L. Schwartz, chairman and chief executive officer of Loral. "With no change to our funding requirements, we are increasing our revenue potential earlier than expected. From an operating perspective, the addition of Telstar 14 to Loral's fleet supplements our existing capacity over Asia, where we currently have one satellite, Telstar 10, operating at a capacity utilization rate in excess of 75 percent. Telstar 14's wide coverage area is well suited to broadcast, broadband and government opportunities from India to China to the U.S. via Hawaii - all markets we've identified as having high growth potential."
APT Satellite Company Ltd. is a major international satellite operator in Asia, and is owned by a consortium of Asian companies in Mainland China, Taiwan, Thailand, and Singapore. It provides high quality satellite transponder and telecommunications services for international and Asia-Pacific broadcasting and communications organizations.
Loral Space & Communications is a high technology company that concentrates primarily on satellite manufacturing and satellite-based services. For more information, visit Loral's web site at www.loral.com.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), provided, however, that forward-looking statements made in connection with the current exchange offer for outstanding shares of Series C or Series D preferred stock do not fall within the provisions of Section 27A of the Securities Act or Section 21E of the Exchange Act. In addition, Loral Space & Communications Ltd. or its representatives have made or may make forward-looking statements, orally or in writing which may be included in, but are not limited to, various filings made by the company with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions which have been described in the section of the company's annual report on Form 10-K for the fiscal year ended December 31, 2001, entitled "Certain Factors That May Affect Future Results," and the company's other filings with the Securities and Exchange Commission. The reader is specifically referred to these documents.
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Contact:
Loral Space & Communications, New York
Jeanette Clonan/Tony Doumlele
212/697-1105
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