Satmex' time to respond to involuntary Chapter 11 petition extended to July 7

By Caroline Salls

Pittsburgh, June 14 - Satelites Mexicanos, SA de CV's time to respond to the involuntary Chapter 11 filing by a group holding more than $379 million of its outstanding secured and unsecured notes was extended to July 7, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Satmex is in default on $523.4 million of debt.

Under the restructuring agreement, the noteholders have agreed, subject to certain conditions, to provide up to $55 million in debtor-in-possession financing to launch Satmex 6, the company's new satellite, which has been stored at the Arianespace launch facility in French Guiana for the last 18 months because Satmex has not had sufficient capital to fund its launch.

Also under the agreement, allowed claims of trade creditors would be paid in full, permitting the company to continue to operate without interruption.

The agreement also provides that current shareholders - including Loral Space & Communications Ltd., Principia, SA de CV and the Mexican government - will maintain majority control of the reorganized company.

The action was filed by holders of the senior secured floating-rate notes due 2004 and of the 10 1/8% senior notes due 2004.

On May 27, Satmex said it was evaluating its options after the involuntary filing and had taken steps to ensure continuation of day-to-day operations.

Satmex, a Mexico-based satellite operator, had the involuntary petition filed against it on May 25. Its Chapter 11 case number is 05-13862.

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