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Technology Stocks : American Mobile Satellite (skyc) -- Ignore unavailable to you. Want to Upgrade?

To: John Gault who wrote (265)	5/19/1998 7:54:00 PM
From: VALUESPEC	Read Replies (2) \| Respond to of 400

Below, you will see the most recent documentation on the ACTEL deal. This deal is expected to take place in the summer (summer starts June 21). It was believed that the ACTEL deal would take place by June 30th, but I'm not sure that is still the case. I will get further confirmation on that soon. Again, the ACTEL deal will immediately bring SKYC up to break-even on an EBITDA basis. Without this deal, it will take a 1 1/2 years or so to achieve. Also, without this deal, break-even on a cash basis won't even be in sight. I see the consummation of the deal as the biggest immediate milestone for SKYC to achieve. With its completion, I am looking for $ 15+ for at least a brief time. I hope this documentation helps those interested to better understand what I am looking for: May 15, 1998 SEC document (S-4) edgar-online.com The notes are as follows: <<SATELLITE LEASE AND PURCHASE AGREEMENT RISKS The five-year Satellite Lease Agreement provides for aggregate lease payments to the Company of $182.5 million. The Satellite Lease Agreement includes a renewal option, at the lessee's election, through the end of the life of MSAT-2, on the same terms, exercisable two and one-half years prior to the end of the initial lease term. The Satellite Purchase Agreement contemplates Holdings' one-half ownership acquisition at a cost of $60.0 million payable in equal installments over a five-year period; certain additional payments to TMI of up to one- 24 half of additional net payments received are contemplated in the event that additional benefits are realized by Holdings with respect to MSAT-2 after the initial lease term. Under the Satellite Purchase Agreement, TMI and Holdings will each own a 50% undivided ownership interest in MSAT-1, will be jointly responsible for the operation of MSAT-1, and will share certain satellite operating expenses, but will otherwise maintain their separate business operations. The Satellite Purchase Agreement and Satellite Lease Agreement are separate transactions and reflect separate sets of obligations for the Company. As a result, it is possible, under certain circumstances, that the Company would remain obligated to make or continue payments under the Satellite Purchase Agreement to TMI without receipt from the lessee of anticipated payments under the Satellite Lease Agreement, principally by virtue of a default of ACTEL. While the Company believes that if ACTEL defaults under the Satellite Lease Agreement, the Company would be able to achieve the return of MSAT-2 from ACTEL to its operation in the United States and terminate its payment obligations to TMI under the Satellite Purchase Agreement, there can be no assurances that such actions can be achieved. In addition, there can be no assurances that the agreements will operate in parallel, or that the Company will not be met with certain completion or transactional risks under the Satellite Lease Agreement. If it is necessary for the Company to make payments under the Satellite Purchase Agreement at a time when it is not receiving payments under the Satellite Lease Agreement, the Company would be materially and adversely affected. Closing under the Satellite Purchase Agreement and Satellite Lease Agreement is subject to a number of conditions, including: a successful financing by ACTEL of at least $120 million; completion of certain satellite testing, inversion and relocation activities with respect to American Mobile's satellite, to support the contemplated services over Africa; receipt of various government authorizations from Gibraltar, South Africa and other jurisdictions to support satellite relocation, including authorizations with respect to orbital slot and spectrum coordination; and completion of certain system development activities sufficient to support satellite redeployment. It is anticipated that the closing under both agreements will occur simultaneously in the third quarter of 1998. While it is anticipated that these transactions would improve the leverage of and provide additional liquidity to the Company, there can be no assurance that such transactions will be consummated simultaneously, or at all.>> SKYC: $ 11.94b $ 12.31a VALUESPEC valuespec.com