Global satellite operator Intelsat has finally filed for an initial public offering on the New York Stock Exchange.
The company is seeking raise approximately US$1.75bn, although the precise number of shares that will be listed and the pricing range for…
Global satellite operator Intelsat has finally filed for an initial public offering on the New York Stock Exchange.
The company is seeking raise approximately US$1.75bn, although the precise number of shares that will be listed and the pricing range for the shares has yet to be determined.
In its filing prospectus, Intelsat stated that Goldman Sachs, JP Morgan and Morgan Stanley are the arrangers and underwriters for the flotation. Majority shareholder BC Partners has engaged Evercore to provide financial advice on certain aspects of the transaction.
The company is to list through holding company Intelsat Global Holdings S.A., which will subsequently be renamed Intelsat S.A post-transaction, and trade under the symbol ‘I’.
Proceeds from the transaction are predominantly going to be used to pay down the company’s substantial debt pile. As of 31 March 2012, Intelsat had US$16.2bn of total debt and paid total interest expenses of US$1.31bn in 2011.
Much of this debt is the result of the US$16.5bn private equity led secondary buyout of the group in February 2008. Following that transaction, Intelsat is majority owned by UK-based private equity firm BC Partners, which holds 71.9% of the company. US-based sponsor Silver Lake Group has a 15.87% stake, while the remaining 12.23% is held by investors including Credit Suisse, Ridgemont Equity Partners (formerly BAML Capital Partners) and Intelsat management.
The company stated in its filing prospectus that it did not believe there were any shareholder arrangements in place that would see a change of control of the company post IPO. Indeed, the listing being contemplated is for the issue of new shares with BC and Silver Lake not selling any of their existing shares in the transaction.
That being said, SatelliteFinance sources have suggested that once Intelsat is publically traded, the sponsors will look for an exit sooner rather than later. To that end, there are no covenants in Intelsat’s existing debt that restrict a change of control.
In its first quarter 2012 results Intelsat reported a 1% year-on-year increase in revenue to US$644.2m and a net loss of US$24.4m. The company reported a 1% fall in adjusted EBITDA of US$496.7m giving it a margin of 77%. As of 31 March 2012, Intelsat’s contracted backlog was US$10.5bn, down from US$10.7bn at of 31 December 2011.
