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Technology Stocks : Loral Space & Communications

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To: dougjn who wrote (2846)	5/2/1998 12:50:00 PM
From: Valueman	Read Replies (2) of 10852

G* will take out the necessary expenditures to build the second generation to the tune of approximately $350 muillion per year from 2002 to 2005--this all happens before the partners see any share. They will start spending on G2 in 2000--total cost looks like $2.2 billion. There is so much unknown though about how things will pan out. If demand is there for mission specific GEOs to service the fixed telephony market, add in $200-250 million per sat there. Since one could handle 10-20 million subs, there is the potential for a great number of these type of GEO sats. They will fall under the G* umbrella. It will take 800,000 subs at 160 minutes per month to generate the cash flow to pay for G2, 400,000 is breakeven. So if we get far enough down the line, the company has indicated its intention to use future cash surpluses to pay dividends to shareholders. By the way, Loral does own over 8 million GSTRF shares(fully converted) on top of their LP units--expect that to rise over the next couple of years. So, I hesitate to go so far out in the future, but at some point they should be paying dividends, unless of course we are a subsidiary of GE at that time!

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