Satmex files pre-packaged Chapter 11 to restructure balance sheet

By Jennifer Lanning Drey

Savannah, Ga., April 6 - Satelites Mexicanos, SA de CV (Satmex) and its subsidiaries Alterna'TV Corp. and Alterna'TV International Corp. have made pre-packaged Chapter 11 bankruptcy filings as the next step in the implementation of the company's previously announced comprehensive balance sheet restructuring, according to a company news release.

The filings were made in the U.S. Bankruptcy Court for the District of Delaware.

Satmex previously announced that it had reached agreement with the holders of more than two-thirds of the outstanding principal amount of its first-priority senior secured notes due 2011 and second-priority senior secured notes due 2013.

As part of the implementation of the pre-packaged plan, Satmex began a solicitation of votes on the plan from holders of the first-priority notes and second-priority notes. Based on the preliminary tabulations of votes filed with the pre-packaged plan, the noteholders overwhelmingly accept the plan, according to the news release.

The proposed pre-packaged plan is structured to expedite the company's emergence from bankruptcy, Satmex said.

$325 million exit loan

In connection with the bankruptcy filing, Satmex said it has entered into a commitment letter with Jefferies Finance LLC providing for $325 million of committed senior secured exit financing.

The financing, along with the proceeds from a previously announced $96.25 million fully backstopped rights offering of equity securities to holders of the second-priority notes, may be used to repay the first-priority notes.

In addition, the loan can be used to fund the completion of Satmex 8, a satellite scheduled to be launched in 2012 to replace the company's Satmex 5 satellite, and to purchase 100% of the current equity in Satmex.

Plan terms

As previously reported, plan terms under the pre-packaged plan of reorganization include:

• The recapitalization will be financed with the proceeds of an offering of up to $325 million principal amount of new senior secured debt financing and the proceeds of a $96.25 million rights offering of equity securities in the indirect parent of reorganized Satmex to eligible holders of second-priority senior secured notes;

• The noteholders will also have the right to invest in their share of an up to $40 million follow-on issuance of equity securities, which may be called by the reorganized company to fund the construction and launch of Satmex 7;

• Holders of Satmex's first-priority senior secured notes due 2011 will be paid out in cash at par plus accrued interest;

• In lieu of equity interests in the indirect parent, primary rights to invest in additional parent interests and the follow-on rights, second-priority noteholders can elect to receive a cash payment of $0.38 for every dollar of notes, which will be funded by supporting noteholders;

• Other creditors, including trade creditors, are expected to be paid in full; and

• Existing Satmex stockholders would receive their share of $6.25 million under a Holdsat Mexico purchase agreement if specified conditions are met.

Debt details

According to court documents filed April 6, Satmex had $441.61 million in total assets and $531.64 million in total debt at the time of the bankruptcy filing.

The company's largest unsecured creditor is Secretaria de Hacienda y Credito Publico of Mexico with a $1.65 million tax claim.

Satmex is a Juarez, Mexico-based satellite coverage provider. The case number is 11-11035.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.