Loral Space & Communications emerges from Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Nov. 22 - Loral Space & Communications Inc. emerged from Chapter 11 bankruptcy Tuesday, according to a company news release.

Loral exits Chapter 11 with about $180 million in cash. During the Chapter 11 reorganization, Loral did not require any debtor-in-possession financing and, as of its emergence, has $126 million of debt in the form of the notes issued by Loral Skynet, the release said.

Loral Skynet has also issued $200 million of preferred stock to certain creditors of Loral Orion.

Under the plan, the company will emerge with its two business units, Loral Skynet and Space Systems/Loral, intact and with current management in place.

Space Systems/Loral will have no debt. The reorganized parent company will be publicly held under current management and will seek listing on a major stock exchange.

Loral Orion's unsecured creditors will receive 80% of the stock of the reorganized company plus $200 million of preferred stock to be issued by the reorganized Skynet. They will also be able to subscribe to $120 million of Skynet notes.

The parent company's bondholders and some other unsecured creditors will receive 20% of new stock of the reorganized company.

Members of Loral's new board of directors, in addition to chairman and chief executive officer Bernard L. Schwartz and non-executive vice chairman Michael B. Targoff, are Sai S. Devabhaktuni, Hal Goldstein, John D. Harkey Jr., Robert B. Hodes, Dean Olmstead, Mark H. Rachesky and Arthur L. Simon.

Loral, a New York-based satellite company, filed for bankruptcy on July 15, 2003 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 03-41710.

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