Loral, creditors' committee reach revised terms on reorganization plan

By Jeff Pines

Washington, Oct. 15 - Loral Space & Communications Ltd. said it reached an agreement with its creditors' committee over revised economic terms for its reorganization plan.

The New York-based satellite company expects to file the plan with the U.S. Bankruptcy Court for the Southern District of New York by Oct. 22 and expects to emerge from Chapter 11 during 2005's first quarter.

Loral and Loral Orion bondholders and other unsecured creditors will get all of the reorganized company's common stock.

Loral Orion bondholders and its other unsecured creditors will also get a share of $200 million of new senior secured notes to be issued by Loral Skynet, Loral's satellite services subsidiary.

Loral Orion's unsecured creditors will also have the opportunity to participate in a rights offering for $30 million of new senior secured notes to be issued by Loral Skynet.

The revised terms leave Loral's Space Systems/Loral and Loral Skynet intact as separate subsidiaries of the reorganized company. Space Systems/Loral, which designs and manufactures satellites, will emerge debt-free.

Creditors of Space Systems/Loral, Loral SpaceCom and Loral Satellite could recover as much as 33% through cash and new Loral common stock based on the company's estimates, Loral said. The actual recovery could be much less if allowed claims exceed the company's estimates, it said.

Preferred and common stockholders will get nothing.

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

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