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Satmex hires adviser to help review capital structure, find financing
By Angela McDaniels
Tacoma, Wash., June 8 - Satelites Mexicanos, SA de CV has retained Lazard Freres & Co. LLC as its adviser to conduct a comprehensive review of the company's capital structure and to help it find financing for the construction of its Satmex 8 satellite, according to a company news release.
The company remains focused on replacing its existing Satmex 5 satellite, reducing cash outflows and decreasing leverage, chief executive officer Patricio Northland said in the release.
On March 17, the company said it was continuing to explore its strategic alternatives and restructuring options after the termination of a stock purchase agreement under which EchoStar Corp. subsidiary EchoStar Satellite Acquisition LLC was going to acquire all of the outstanding share capital of Satmex in conjunction with a Mexican joint venture partner.
As previously reported, EchoStar terminated the stock purchase agreement because Satmex did not obtain necessary consents and waivers from its noteholders.
The company later received waivers from the holders of its first-priority senior secured notes due 2011 and its second-priority senior secured notes due 2013 that allows it to enter into a satellite construction agreement with Space Systems/Loral, Inc. and to make up to $100 million of cash payments in connection with the agreement and a satellite launch agreement.
In return, Satmex agreed to increase the interest rate on the first-priority notes to Libor plus 925 basis points from Libor plus 875 bps with further potential increases upon the occurrence of certain events, including the failure by Satmex to enter into an agreement for the sale of all or substantially all of its assets or capital stock prior to May 30.
As of May 30, the company had not entered into such an agreement. As a result, the coupon on the first-priority notes was increased to 12%, effective through June 30.
Satmex is a Juarez, Mexico-based satellite coverage provider.
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