Loral, which has been court-protected from creditors for 2 1/2 years, began normal operations Tuesday with about $180 million in cash.

It also has "only" $126 million of debt in the form of the notes issued by Loral Skynet, the company said. Loral Skynet has also issued $200 million of preferred stock to certain creditors of Loral Orion.

In addition, Loral is issuing 20 million shares of new common stock to some creditors.

Loral's prior common and preferred stock was canceled Monday with no distribution made to holders of such stock.

related report
Loral Emerges From Chapter 11
New York NY (SPX) Nov 23 - Loral Space & Communications has announced that it has officially concluded its reorganization and has successfully emerged from chapter 11.

Bernard L. Schwartz, Loral's chairman and chief executive officer, said: "Loral has reached an important milestone with its emergence from chapter 11. It is a great triumph for the men and women of our workforce, who stayed focused on their jobs, upheld our high manufacturing and service standards and kept Loral in the forefront of the industry.

"Over the last two-and-a-half years, we have created a stronger, leaner and more efficient Loral. We have won new awards and customers, and we continue to seek and capture opportunities in many new and traditional markets. We are confident that the momentum we have built will benefit all our constituents."

Throughout the chapter 11 process, Space Systems/Loral (SS/L) remained the premier manufacturer of commercial satellites, increasing its market share and winning more than a third of the dollar value of all contracts awarded over the last 18 months, more than any other commercial satellite manufacturer.

Loral Skynet's fleet is well-positioned to serve areas with high growth potential such as Asia, Europe, Latin America, the Middle East and the trans-Atlantic market. Skynet has also expanded its services beyond traditional FSS leases with the introduction of new IP-based data services.

Loral's new XTAR joint venture has been awarded contracts for service to the U.S. State Department and the Spanish Ministry of Defense.

Loral exits chapter 11 with approximately $180 million in cash. During the chapter 11 reorganization, Loral did not require any debtor-in-possession (DIP) financing, and, as of its emergence from chapter 11, has only $126 million of debt in the form of the notes issued by Loral Skynet. Loral Skynet has also issued $200 million of preferred stock to certain creditors of Loral Orion.

Members of Loral's new board of directors, in addition to chairman and CEO Bernard L. Schwartz and non-executive vice chairman Michael B. Targoff, are Sai S. Devabhaktuni, Hal Goldstein, John D. Harkey Jr., Robert B. Hodes, Dean Olmstead, Mark H. Rachesky and Arthur L. Simon.

In accordance with the Plan of Reorganization, the company is issuing 20 million shares of new common stock in Loral Space & Communications Inc. to certain of its creditors. Loral's prior common and preferred stock was cancelled as of November 21, 2005 with no distribution made to holders of such stock.

When shares of the new Loral Space & Communications Inc. common stock are distributed, they will begin trading on the NASDAQ market under the ticker "LORL." Loral Space & Communications common stock is currently trading as a "when-issued" stock on the over-the-counter (OTC) market under the ticker "LRALV."

Business Segments

Satellite Manufacturing - Space Systems/Loral

Space Systems/Loral's backlog at the end of the third quarter was $902 million, compared with $399 million a year earlier. Since the beginning of Loral's reorganization in July 2003, Space Systems/Loral has received orders for nine satellites from seven separate customers, more than any other manufacturer during the same time period.

Orders came from a wide variety of service providers: FSS operators, mobile telephony providers, digital audio radio service (DARS) and direct-to-home service providers, including leading operators such as DIRECTV, EchoStar, Intelsat, PanAmSat and XM Satellite Radio. SS/L has delivered and launched nine satellites over the last 24 months.

Satellite Services - Loral Skynet

Loral Skynet had a backlog of $502 million at the end of the third quarter versus $529 million a year earlier. During the last two years, Loral Skynet shifted its focus from primarily a fixed satellite services operator to a full-service communications solutions provider with hybrid space/terrestrial capabilities.

Skynet's fleet of satellites strategically positioned around the globe in combination with its terrestrial communications resources can provide customers with one-stop connectivity. In addition, Skynet shares resources with Loral's XTAR joint venture, allowing each to cross-market capacity to governments around the world.

Copies of Loral's Plan of Reorganization, as confirmed, and Disclosure Statement are available on the Loral website. The documents also are available via the court's website. Please note that a PACER password is required to access documents on the Bankruptcy Court's website. Loral's bankruptcy case number is 03-41710 (RDD).

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