Loral Space & Communications' plan of reorganization confirmed

By Caroline Salls

Pittsburgh, July 25 - Loral Space & Communications Ltd.'s plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the Southern District of New York, according to a company news release.

According to the release, Loral expects to emerge from Chapter 11 bankruptcy early in the fourth quarter of 2005.

"Coming out of Chapter 11, we will have a strengthened balance sheet, little debt, an experienced management team and two core businesses that are technology and service leaders in their respective segments - all the ingredients needed to build on Loral's recent successes," chairman and chief executive officer Bernard L. Schwartz said in the release.

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 the stock of the reorganized company.

Loral, a New York-based satellite company, filed for bankruptcy on July 15, 2003. Its Chapter 11 case number is 03-41710.

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