Satmex has entered into a definitive agreement with Space Systems Loral for the construction of the Satmex 8 spacecraft.
Satmex confirmed the deal after receiving permission from its bondholders to proceed. The total cost of Satmex 8 will be around…
Satmex has entered into a definitive agreement with Space Systems Loral for the construction of the Satmex 8 spacecraft.
Satmex confirmed the deal after receiving permission from its bondholders to proceed. The total cost of Satmex 8 will be around US$350m, and the agreement with Loral specifies that Satmex must make payments of around US$65m over the next five months.
This level of expenditure exceeds that permitted by the indentures governing its debt. Satmex therefore has obtained waivers to proceed from the holders of its debt – the US$238.2m First Priority Senior Secured Notes which mature in 2011 and the US$175m Second Priority Senior Secured Notes due 2013.
The waivers allow Satmex to enter into definitive agreements for the manufacture and launch of Satmex 8, and the payment of up to US$100m in connection to this.
One condition of the waiver is that the interest payable on its First Priority Notes has been increased from 8.75% plus LIBOR to 9.25% plus LIBOR.
Satmex 8 will replace Satmex-5 and operate at the 114.9W orbital slot, where it will cover the USA and Latin America. It is expected to carry 64 transponders, across Ku and C-band.
The waiver represents the concession from the bondholders that was necessary in light of the way in which they blocked the attempted takeover of Satmex by EchoStar in March this year.
In the event of no takeover, the only way the bondholders could improve their chances of securing any improved degree of recompense from Satmex was to work towards a new satellite.
The fact that the waiver only covers US$100m of the Satmex 8 costs suggests that the company will seek further financing to fund the project.