Loral Space & Communications, and certain of its subsidiaries, Thursday filed a proposed plan of reorganization (the Plan) with the U.S. Bankruptcy Court for the Southern District of New York.
The Plan is supported by the Official Committee of Unsecured Creditors appointed in Loral’s chapter 11 case. The company expects to exit chapter 11 under current management before the end of the year.
The Plan, which is subject to confirmation by the bankruptcy court, resulted from negotiations between the company and the Creditors’ Committee to implement the previously announced agreement in principle. It provides, among other things, that:
– Loral’s two businesses, Space Systems/Loral and Loral Skynet, will emerge intact as separate subsidiaries of reorganized Loral (New Loral).
– Space Systems/Loral, the satellite design and manufacturing business, will emerge debt-free.
– The common stock of New Loral will be owned by Loral bondholders, Loral Orion bondholders and other unsecured creditors.
In addition, bondholders and other creditors of Loral Orion will receive an aggregate of $200 million in new senior secured notes to be issued by reorganized Loral Skynet, New Loral’s satellite services subsidiary.
– New Loral will emerge as a public company and will seek listing on a major stock exchange.
– Existing common and preferred stock will be cancelled and no distribution will be made to current shareholders.
The plan of reorganization is available via the court’s website, at www.nysb.uscourts.gov/. 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).
