Satmex to make change-of-control tender offer for senior secured notes

By Angela McDaniels

Tacoma, Wash., March 1 - Satelites Mexicanos SA de CV plans to offer to purchase all of its outstanding first-priority senior secured notes due 2011 and second-priority senior secured notes due 2013 for cash.

The tender offer for the $424.25 million outstanding principal amount of notes is required under the company's agreement to be acquired by EchoStar Satellite Services LLC and MVS Comunicaciones, according to a joint news release from the companies.

The tender offer will be made upon the closing of the sale, which is expected to close early in the third quarter.

The tender offer and the acquisition are subject to the receipt of some consents from the noteholders, including consents to modify or eliminate most of the covenants in the note indentures, and various corporate approvals.

The company will seek lock-up agreements with the noteholders under which the holders would agree to sell their notes to Satmex for a specified price and subject to certain conditions, according to a 6-K filing with the Securities and Exchange Commission.

An ad hoc committee of noteholders has been formed. The committee currently includes holders of a majority of the second-priority notes and holders of less than a majority of the first-priority notes.

Satmex will be acquired for approximately $267 million in cash plus up to $107 million in cash on Satmex's balance sheet at closing.

Satmex is a satellite service provider based in Juarez, Mexico.

EchoStar Satellite Services is a Englewood, Colo.-based subsidiary of EchoStar Corp. Mexico City-based MVS Comunicaciones is a media and telecommunications company and EchoStar's partner in the Mexican direct-to-home TV service Dish Mexico.

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