The long mooted listing of global FSS operator Intelsat took a step closer following the company’s filing of application for transfer of control with the FCC.
Under the filing, Intelsat requested consent to transfer control of all of its licences and…
The long mooted listing of global FSS operator Intelsat took a step closer following the company’s filing of application for transfer of control with the FCC.
Under the filing, Intelsat requested consent to transfer control of all of its licences and authorisations pursuant to a public offering of newly issued Intelsat voting shares, possibly private placements of newly issued voting shares and subsequent voting share sales by current shareholders.
The filing added that the licensees are currently indirectly controlled by the UK-based private equity firm BC Partners but that following any transaction, no single entity is likely to hold 50% or more of the voting shares in Intelsat. Accordingly, Intelsat seeks Commission consent for the transfer of both de jure and de facto control from BC Partners to public ownership.
However, an Intelsat spokesperson said that the move did not mean that the company was on the verge of an initial public offering. A company statement read: “Our current owners acquired Intelsat nearly 4 years ago (in February of 2008) and we expect that they will seek to exit their investment, as is typical with any private equity transaction. The FCC filing is a regulatory requirement that allows them to do so. The filing is not intended to provide precise details with respect to the structure or timing of an exit, which will depend on industry and company factors and general market conditions. We do not comment on our capital markets plans.”
To that end, one source told SatelliteFinance that given the current turbulence in equity markets, a listing was highly unlikely in the short term.
BC Partners currently owns 71.9% of Intelsat with US-based sponsor Silver Lake Group holding a 15.87% stake. The remaining 12.23% is held by investors including Credit Suisse, Ridgemont Equity Partners (formerly BAML Capital Partners) and Intelsat management.
Ever since the US$16.5bn secondary buyout, Intelsat has had to manage significant interest payments on a debt pile of just over US$16bn (as of 30 September 2011). While the satellite operator successfully refinanced much of that debt, extending the maturities to a point where the majority of its debt does not mature until after 2015, the costly interest payments have stymied many of its expansion plans.
In the change of control filing to the FCC, Intelsat stated that proceeds form any listing could be used to repay a significant portion of its debt.
The company was believed to have looked a potentially making a bid for rival satellite operator Telesat late last year and according to some SatelliteFinance sources had held talks with three sovereign wealth funds – GIC of Singapore, CIC of China and one from the Middle East – over making equity investments in the company in order to help fund any deal.
