Satmex noteholders retain counsel in connection with recapitalization

By Caroline Salls

Pittsburgh, March 1 - Satelites Mexicanos, SA de CV (Satmex) said some of the holders of its first-priority senior secured notes due 2011 have hired Michael J. Sage of Dechert LLP as counsel in connection with the company's proposed pre-packaged recapitalization plan, according to a company news release.

The first-priority noteholders plan to discuss the next steps in an organizational telephone conference scheduled for March 2.

As previously reported, Satmex has reached an agreement with holders of more than two-thirds of the outstanding principal amount of its second-priority senior secured notes due 2013 regarding a recapitalization to be implemented through a pre-packaged plan of reorganization.

The pre-packaged plan will be filed in the U.S. Bankruptcy Court for the District of Delaware.

Under the proposed plan, holders of the first-priority notes will be paid out in cash at par plus accrued interest without premium or penalty.

To the extent not paid under a bankruptcy court order approving the use of cash collateral or otherwise paid, the fees and expenses of the first-priority notes indenture trustee and collateral trustee will be paid in full in cash.

Satmex said it has also obtained a commitment from Jefferies Finance LLC for $325 million of senior secured exit financing.

This financing can be used along with the proceeds of a previously announced $96.25 million fully backstopped rights offering of equity securities to holders of the second-priority notes to repay the first-priority notes, fund the completion of the Satmex 8 satellite and replace the company's Satmex 5 satellite.

Completion of the recapitalization is subject to regulatory approvals and other conditions, the release said.

Satmex is a Juarez, Mexico-based satellite coverage provider.

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