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All Business Units Expected to Emerge Debt-Free From Chapter 11 By Year End

NEW YORK - July 22, 2004 - Loral Space & Communications Ltd. announced that it has reached an agreement with the Official Committee of Unsecured Creditors in its chapter 11 reorganization on the principal terms of a plan of reorganization that will lead to the early filing of a consensual plan for Loral and an exit from chapter 11 proceedings by the end of the year. The agreement provides for a reorganization that will leave Loral under current management, with its two businesses, Space Systems/Loral and Loral Skynet, intact and substantially debt-free. Loral will be a public company upon emergence and expects to be listed on a major exchange in due course.

Space Systems/Loral is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications. It is one of only five such manufacturers in the world. Loral Skynet operates a global integrated fixed satellite and network/professional services business using its fleet of four telecommunications satellites.

Under the proposed consensual plan of reorganization, all pre-petition institutional debt will be exchanged for substantially all of the equity of the reorganized company. It is contemplated that under the plan of reorganization, all other pre-petition general unsecured creditors will be offered an option to elect either a discounted cash payment or a payout over time. Loral is highly confident, given the support from the Official Creditors' Committee, that the plan will receive the required favorable vote from creditors and confirmation by the court. The plan does not provide for any recovery or participation in reorganized Loral by the holders of Loral's existing common or preferred stock.

Bernard L. Schwartz, chairman and chief executive officer, said: "This agreement enables us to fulfill most of the core objectives we established one year ago at the start of the chapter 11 process. Space Systems/Loral and Loral Skynet have continued to serve customers and generate cash flow throughout the year. Further, relieved of the burden of debt, Loral will have the financial strength necessary to capitalize on an improving industry environment and expand its leadership role in the satellite services and manufacturing businesses. We deeply regret the unavoidable exclusion of the present equity holders. We believe that the plan that has been negotiated presents the best opportunity to maintain Loral's industry position over the long term. We are grateful to our employees, customers, suppliers and business partners for their loyalty and support during the chapter 11 process."

Loral Space & Communications is a satellite communications company. It owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, distribute broadband data, and provide access to Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management.

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This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, Loral Space & Communications Ltd. or its representatives have made or may make forward-looking statements, orally or in writing, which may be included in, but are not limited to, various filings made by the company with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. These factors include those related to the filing, on July 15, 2003 by Loral and certain of its subsidiaries, of voluntary petitions for reorganization under chapter 11 of title 11 of the United States Code in the United States District Court for the Southern District of New York and parallel insolvency proceedings in the Supreme Court of Bermuda in which certain partners of KPMG were appointed as joint provisional liquidators. Additional factors and conditions are also described in the section of the company's annual report on Form 10-K for the fiscal year ended December 31, 2003, entitled "Commitments and Contingencies," and the company's other filings with the Securities and Exchange Commission. The reader is specifically referred to these documents.

Jeanette Clonan
Loral Space & Communications

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