Loral Space & Communications files plan; bondholders to get most of reorganized company

By Jeff Pines

Washington, Aug. 19 - Loral Space & Communications Ltd. filed its reorganization plan with the U.S. Bankruptcy Court for the Southern District of New York Thursday.

The plan calls for the company's bondholders, Loral Orion bondholders and general unsecured claimsholders to get the stock of the reorganized company.

In addition, they will also get $200 million of new seven-year 14% senior secured notes to be issued by Loral Skynet, the company's new satellite services unit. According to the plan, 9% of the interest will be payable in kind for the first year and 7% payable in kind in the second year.

Loral's two subsidiaries, Space Systems/Loral and Loral Skynet will emerge intact as separate units of Loral Space & Communications. Space Systems/Loral also will emerge debt free, Loral Space & Communications said.

As for the New York-based satellite company's common and preferred stock, both will be cancelled.

The company did not file its disclosure statement but asked the court to give it more time to file the statement. Loral said it has spent so much of its time and energy reaching a plan agreeable to its creditors' committee that it has not had the time to prepare a disclosure statement.

A Sept. 15 hearing on an extension for filing the disclosure statement is scheduled.

Loral filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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