Intelsat gets the OK for restructure after bankruptcy filing

Struggling US satellite firm Intelsat has been given the go ahead to action its bankruptcy plan, which is designed to halve its debt.

The Bankruptcy Court for the Eastern District of Virginia has given approval for the firm to complete its financial restructuring, which is intended to reduce its debt from approximately $16 billion to $7 billion. Intelsat filed for Chapter 11 in May 2020 to fund the clearing costs associated with the US C-band auction.

The firm is set to emerge as a private company with new equity owners, and access to $7.875 billion in capital. It says it now has its sights set on building the world’s first global 5G satellite-based, software-defined, unified network.

“Today’s Plan confirmation is a key milestone in Intelsat’s transformation. We have achieved all of the goals we identified at the outset of the process, including a substantial reduction of our legacy debt burden,” said Intelsat’s Chief Executive Officer, Stephen Spengler.

“Throughout the process, we have driven our business forward at full speed – launching new satellites, advancing the accelerated clearing of C-band spectrum, acquiring Gogo’s commercial aviation business, progressing our next generation network and service strategy, and serving customers every day with the excellence for which we are known.”

Taking on eye watering levels of debt is part and parcel of the satellite game due partly to the sheer financial heft it takes to launch equipment into space, and bankruptcies are not uncommon. Though as we pointed out back in August, given the current levels of activity in the satellite space and the potential demand for satellite broadband services, there’s plenty of potential for Intelsat to remerge in a stronger position and float again in the future.