Satellite giant Intelsat files for bankruptcy protection
Satellite operator Intelsat has filed for Chapter 11 bankruptcy protection in the US, reportedly making it the latest casualty of severe business disruptions caused by the COVID-19 pandemic.
Intelsat is the operator of the world’s largest and most advanced satellite fleet and connectivity infrastructure.
Chapter 11 bankruptcy protection involves the reorganisation of a debtor's business affairs, debts and assets. According to the regulations, businesses generally file for Chapter 11 if they require time to restructure their debts.
This protection version of bankruptcy reportedly gives the debtor a fresh start. However, the terms are subject to the debtor's fulfilment of obligations under the plan of reorganisation.
Reuters reports the company’s listed assets and liabilities are in the range of $10 billion to $50 billion, according to a filing in the US.
In a statement, Intelsat says it is undertaking financial restructuring to pave the way for future innovation and growth, and filing for bankruptcy protection is part of the strategy.
“To facilitate the financial restructuring, Intelsat and certain of its subsidiaries have filed voluntary Chapter 11 petitions in the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division. Intelsat General, which serves the company’s US commercial, government and allied military customers, is not part of the Chapter 11 proceedings.”
However, it says while it moves as quickly as possible through the restructuring process, Intelsat’s day-to-day operations, engagement with customers and partners, and capital investments will continue as usual.
“The company will continue to drive its business forward – launching new satellites, investing in its ground networks, developing new services, and progressing Intelsat’s next-generation network and service strategy at full speed. No changes to the company’s operations or workforce are planned,” reads the statement.
“This is a transformational moment in the history of our company,” says Stephen Spengler, CEO of Intelsat.
“Intelsat is the pioneer and foundational architect of the satellite industry. For more than 50 years, we have been respected for quality, innovation, sector leadership and premium services. Our success has come despite being burdened in recent years by substantial legacy debt. Now is the time to change that.
“We intend to move forward with the accelerated clearing of C-band spectrum in the United States and to achieve a comprehensive solution that would result in a stronger balance sheet. This will position us to invest and pursue our strategic growth objectives, build on our strengths, and serve the mission-critical needs of our customers with additional resources and wind in our sails.”
It’s not clear how this move will impact the company’s operations in Africa.
Intelsat has commercial relations with telecoms group Liquid Telecom. The two signed an agreement to introduce high-performance Intelsat EpicNG satellite services into the Liquid Telecom network.
The multi-year agreement saw Liquid Telecom commit to dedicated services on the Intelsat 33e satellite, which began operations in 2017.
At the time, Liquid Telecom said Intelsat's high-throughput satellite solutions would help it deliver more bandwidth with greater efficiency, to meet the growing needs of businesses across Africa.
The services were expected to expand Liquid Telecom's coverage and network capabilities across the Democratic Republic of Congo, Kenya, Malawi, SA, Tanzania, Uganda, Zambia and Zimbabwe, where demand has grown for VSAT technology to deliver connectivity to underserved remote or rural areas.