Satmex has begun pushing ahead with the pre-packaged plan of reorganisation and US$460m recapitalisation transaction that is central to its restructuring strategy.
On 3 March, the Mexican satellite operator began soliciting votes on the pre-pack plan…
Satmex has begun pushing ahead with the pre-packaged plan of reorganisation and US$460m recapitalisation transaction that is central to its restructuring strategy.
On 3 March, the Mexican satellite operator began soliciting votes on the pre-pack plan from its major creditors, consisting of the holders of the first priority senior secured notes due 2011 and second priority senior secured notes due 2013, with the solicitation period due to expire on 4 April. If the company secures sufficient votes it will file voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code and seek prompt confirmation of the pre-packaged plan.
Concurrent with this, SatelliteFinance understands that company is moving forward with the US$325m debt financing and following a tender process of five banks, has mandated Jefferies to manage the process.
Satmex is expected to come to market with the dollar-denominated debt in April, just after the solicitation period expires. The financing is also more likely to be via a bond than a loan.
Alongside the debt financing, Satmex plans to raise up to US$96.25m through a rights issue to the second lien bondholders. These lenders will then also have the right to invest in their pro rata share of a follow-on stock issuance of up to US$40m.
Proceeds from the recapitalisation will be used to repay the first priority bondholders, other creditors and existing Satmex shareholders as well as to fund the construction and launch of the Satmex 8 satellite. For the Satmex creditors, the Satmex 8 satellite is seen as vital to preserving the value of the company.
An additional spacecraft, Satmex 7, which would replace Solidaridad 2, is then likely to be ordered within the year. This satellite is expected to create additional value in the company for its new owners.
