Loral Files Consensual Plan of ReorganizationTuesday March 22, 12:22 pm ET
NEW YORK, March 22 /PRNewswire-FirstCall/ -- Loral Space & Communications Ltd. (OTC Bulletin Board: LRLSQ - News) today filed a revised plan of reorganization (the Plan) with the Bankruptcy Court.
The Plan, which revises the terms of a plan previously filed on December 5, 2004, reflects an agreement among the company, the Creditors' Committee and the Ad-Hoc Committee of Space Systems/Loral (SS/L) trade creditors on the elements of a consensual plan of reorganization. It is subject to confirmation by the Bankruptcy Court. The Plan provides, among other things, that:
* Loral's two businesses, satellite manufacturing (New SS/L) and satellite
services (New Skynet), will emerge intact as separate subsidiaries of
reorganized Loral (New Loral).
* New SS/L will emerge debt-free and continue its current activities,
including completion of all satellites under construction or on order,
and active pursuit of additional new awards.
* New Skynet will continue to provide transponder leasing, network and
professional services to current and prospective customers.
* New Loral will emerge as a public company under current management and
will seek listing on a major stock exchange.
* Holders of allowed claims against SS/L and Loral SpaceCom will be paid
in full in cash, including interest from the petition date to the
effective date of the Plan.
* Loral Orion unsecured creditors will receive approximately 80 percent of
New Loral common stock and their pro rata share of $200 million of
preferred stock to be issued by New Skynet. These creditors also will
be offered the right to subscribe to purchase their pro-rata share of
$120 million in new senior secured notes of New Skynet. This rights
offering will be underwritten by certain Loral Orion creditors who will
receive a fee which may be payable in additional New Skynet notes.
* Loral bondholders and certain other unsecured creditors will receive
approximately 20 percent of the common stock of New Loral.
* Loral's existing common and preferred stock will be cancelled and no
distribution will be made to the holders of such stock.
Implementation of the Plan and the treatment of claims and equity interests as provided in the Plan are subject to final documentation and confirmation by the Bankruptcy Court. Loral cannot predict with certainty when or if confirmation of the Plan will occur.
The Plan will be available today, Tuesday, March 22, 2005, on Loral's website at loral.com. The document also will be available via the court's website, at nysb.uscourts.gov. Please note that a PACER password is required to access documents on the Bankruptcy Court's website. Loral's bankruptcy case number is 03-41710 (RDD).
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