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Intelsat Files for Bankruptcy Ahead of Spectrum Auction

May 14, 2020, 08:45 AM
Filed Under: Bankruptcy
Related: Bankruptcy, Intelsat

Intelsat S.A., a global satellite company, and certain of its subsidiaries commenced voluntary cases under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”). The Debtors filed a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases under the caption “In re: Intelsat S.A., et al.”

No trustee has been appointed and each Debtor will continue to operate its business as a “debtor-in-possession” (DIP) subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Debtors expect to continue their operations in the ordinary course of business during the pendency of the Chapter 11 Cases. To ensure ordinary course operations, the Debtors have filed motions seeking orders from the Bankruptcy Court approving a variety of “first day” motions.

The Company entered into a commitment letter (the “Commitment Letter”) with certain parties (the “Commitment Parties”) pursuant to which, and subject to the satisfaction of certain customary conditions, including the approval of the Bankruptcy Court, the Commitment Parties have agreed to backstop a non-amortizing multiple draw super-priority senior secured debtor-in-possession term loan facility in an aggregate principal amount of $1.0 billion.

The proceeds of all or a portion of the proposed DIP Facility may be used for, among other things, general corporate purposes, including working capital and permitted acquisitions, administrative costs, premiums, expenses and fees of the transactions contemplated by the Chapter 11 Cases, for the potential payment of C-Band spectrum relocation costs, for payment of court approved adequate protection obligations and other such purposes consistent with the proposed DIP Facility.

The terms and conditions of the DIP Facility are set forth in the form Superpriority Secured Debtor In Possession Credit Agreement attached to the Commitment Letter. The DIP Facility is expected to include conditions precedent, representations and warranties, affirmative and negative covenants and events of default customary for financings of this type and size.

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