Loral Space and Communications is set to sell up to 19.9% of manufacturer Space Systems Loral through an Initial Public Offering (IPO).
Loral CEO Michael Targoff announced the move during the group’s conference call for its first quarter results.
He…
Loral Space and Communications is set to sell up to 19.9% of manufacturer Space Systems Loral through an Initial Public Offering (IPO).
Loral CEO Michael Targoff announced the move during the group’s conference call for its first quarter results.
He said that Loral is pursuing the sale “in order to support further growth of SS/L.” Loral has hired two investment banks to advise on the sale, and on other strategic alternatives for the company.
“We look forward to raising the capital that will enable us to grow and expand opportunities for our manufacturing business,” said Targoff.
Loral Communications Director Wendy Lewis told SatelliteFinance that the company could release no further information, as it is till preparing the filing for the IPO.
Space Systems Loral recorded first quarter revenues of revenues of approximately US$230.8m compared to US$216.4m in the first quarter of 2009. Adjusted EBITDA was up US$2.3m year-on-year to US$12.7m. The company’s order backlog as of March 31 was US$1.4bn.
These figures do not point to an ailing manufacturer in need of a cash injection from new investors to steady the ship. They are stable. However, as reflected in Targoff’s words, Loral is looking for genuine growth from SS/L, not just stability.
Loral will hope that any new investor will bring added strategic as well as financial benefit to SS/L. The manufacturer has established itself as a leader in terms of the technical expertise it has consistently displayed in cutting edge satellite technology.
It has displayed its ability to build advanced Ka-band broadband satellites such as WildBlue-1 and the upcoming ViaSat-1.
It has also committed to the development of larger and larger commercial spacecraft, such as the in-development ABS-2 for Asia Broadcast Satellite, which will carry 78 transponders in Ku, Ka and C-Band.
Given this context, it is reasonable to assume that Loral would like to widen the range of markets in which SS/L currently has a productive presence. It is a strong performer in the Americas, with the Loral-owned Telesat a frequent customer. The new IPO is more likely to prove successful in supporting further growth if SS/L can position itself as a genuine alternative choice to EADS Astrium and Thales Alenia Space in Europe, the Middle East and Africa.