Satellite service provider Intelsat secured approval from a US court to push ahead with a financial restructuring plan which will see the company more than half its debt load and emerge from bankruptcy protection in early 2022.
Intelsat entered bankruptcy protection in May 2020 and first submitted its proposal in February this year as it sought to emerge from Chapter 11 protection at the end of 2021.
The company stated the US Bankruptcy Court for the Eastern District of Virginia had now approved its plan, leaving it poised to exit bankruptcy protection providing it gains regulatory approvals and completes certain corporate actions.
Court approval means Intelsat is able to cut debt from $16 billion to $7 billion and it has support from all creditor groups across its capital structure, after resolution “of a multitude of complex issues”.
These included numerous creditor objections to its plan and issues regarding relocation payments of approximately $4.9 billion from the US Federal Communications Commission (FCC) covering C-Band spectrum, with the company facing opposition over its pay-out from satellite rival SES.
With the issues now resolved, Intelsat stated it would be granted the full $4.9 billion, $1.2 billion of which it expects to receive in January 2022 after hitting coverage targets set by the FCC.
Intelsat CEO Stephen Spengler said approval of its plan was a key milestone in its transformation, while it had pushed ahead with its business throughout the process at “full speed”.
“With a strengthened balance sheet, strong operating model, and unparalleled global orbital and spectrum rights, scale, and partnerships, we will be better positioned to advance our strategic objectives.”