EchoStar Communications Corp. has expressed interest in acquiring the
satellite assets of Loral Space & Communications Ltd., throwing a wrench
into a proposed deal by Intelsat Ltd. to purchase the fleet.
Loral filed for Chapter 11 bankruptcy protection in July.
Intelsat had bid $1 billion for Loral’s North American satellite fleet --
five birds that are operational and one slated to launch next year -- and it was
named by the court as the lead bidder in an auction for the assets slated for
Oct. 20.
According to sources familiar with the situation, EchoStar sent a letter to
Loral’s board of directors, which was discussed at a bankruptcy-court hearing in
New York Monday. Although EchoStar did not formally bid for the assets in that
letter, it expressed interest in buying them.
According to a report on Dow Jones Newswires, EchoStar placed a $1 billion
value on the satellite fleet and $450 million on Loral’s other assets. Sources
familiar with the situation said the other assets are likely Loral’s
satellite-manufacturing facilities.
The Intelsat bid was only for the six satellites.
Intelsat spokeswoman Susan Gordon said the satellite-service provider was
aware of the EchoStar letter, adding that it would not change Intelsat’s offer
for the assets.
"We’ve known all along that this was going to be an open bidding process,"
Gordon said. "We’re not surprised that other people are interested. These assets
are pretty valuable. We have a deal that we are trying to move forward -- it has
been approved by our shareholders, it has been approved by our board, it’s been
approved by the Loral board. And we have completed due diligence, and our deal
is fully financed. Those are steps EchoStar clearly hasn’t taken."
EchoStar would neither confirm nor deny the existence of the letter.
"We have not made a determination whether to participate with a bid in the
Loral bankruptcy case at this time," EchoStar spokesman Steve Caulk said. He
declined further comment.
Four of the five operational satellites mainly carry television signals on a
wholesale basis for major networks like ABC, CBS and Fox.
The fifth, called EchoStar IX/Telsat13, launched earlier this month, and it
is jointly owned by EchoStar and Loral. EchoStar operates the Ku-band payload of
EchoStar IX/Telsat 13 to enhance its Dish Network direct-broadcast satellite
service and a Ka-band spot beam for broadband services. The C-band payload is
owned and operated by Loral.
