Intelsat FCC issues, potential bankruptcy, and effect on launch market

[Nilof]

Not sure where to put news about Intelsat, but after being one of SpaceX's major customer for a while, it apparently just got screwed over by the FCC over spectrum rights with a forced auction, which made its stock tumble from ~$30 to ~$3 (so it is currently valued at a more or less fair bankruptcy value).

I remember Elon also chiming in on the 5G spectrum grab. Was wondering if anyone has followed this lately and what their thoughts on this are? Does it affect satellite broadcasts and will it lead to a further downturn in the comsat launch market?

[gongora]

Intelsat has been flirting with bankruptcy for years, and its stock has returned to its normal price after a temporary bubble caused by speculators trying to cash in on the C-band transition.  Personally I'd have no problem with those stock speculators losing their investment.

[su27k]

Actually isn't the C-band deal going to create some extra launch demands? I think they'll need 8 replacement GEO satellites in a fairly short time, seems to be a small boom for the launch market.

[su27k]

FCC approves $9.7 billion package to speed C-band clearing

[Hog]

Wow, clearing C-Band?  Where will NASA TV go?

[su27k]

Wow, clearing C-Band?  Where will NASA TV go?

They're not clearing the entire C-Band, just carve out part of it to be used by 5G.

[Hog]

Wow, clearing C-Band?  Where will NASA TV go?

They're not clearing the entire C-Band, just carve out part of it to be used by 5G.

thank you, I was seriously wondering why this wasn't more NEWSworthy.

[gongora]

[Bloomberg - April 14, 2020] Intelsat Seeks Bankruptcy Loan While Awaiting Key Spectrum Sale

Intelsat SA is seeking backers for a bankruptcy loan that would keep the satellite service in business under Chapter 11 court protection while it’s waiting for billions of dollars in proceeds from a government spectrum auction. Its bonds led decliners in the high-yield market.
...
A Chapter 11 bankruptcy filing would allow Intelsat to address its $14 billion debt load as federal regulators head toward an auction of C-Band satellite spectrum.

[FutureSpaceTourist]

twitter.com/intelsat/status/1260780910649147393

We are at a transformational moment in the history of our company. We just announced a financial restructuring to position us for long-term success. No change in our momentum, just enhanced resources to grow.

See what lies ahead: https://intelsatonward.com/

https://twitter.com/jeff_foust/status/1260913306551881729

That’s one way to announce a Chapter 11 filing…

[gongora]

Intelsat may have ordered some of their replacement C-band satellites:
[Space News] Maxar announces multi-satellite GEO order as pandemic crimps quarter

[gongora]

The web site for the bankruptcy case:
https://cases.stretto.com/intelsat

[RocketGoBoom]

Intelsat aiming to cut debt in half through bankruptcy

https://spacenews.com/intelsat-aiming-to-cut-debt-in-half-through-bankruptcy/

Intelsat hopes it can eliminate around half of its $15 billion debt load through its recent bankruptcy, a change that would free the company to invest in next generation satellite technologies, according to a company executive.

“This was something that we’ve had to deal with for a while,” Samer Halawi, Intelsat’s chief commercial officer, said of the company’s debt during a May 15 SpaceNews webinar. “It was a burden on us, and it wasn’t allowing us to invest in as much of the innovation and new things that we have wanted to over the years.”

This is sort of a hilarious statement for the current top officers of Intelsat to make. It is basically saying, "we have done a lousy job of managing the company, and we are tired of paying our bills. So let's dump the debt so we can run up a bunch of new debt to buy shiny new things."

The creditors of the company will own Intelsat when this is over and they will likely replace the current group that failed. I read that Carl Icahn owns 5% of the shares and a lot of the debt. So he will likely play a huge role in the re-org. As an activist investor, he is unlikely to leave the current group in charge of running the company. Just my opinion.

[Nilof]

Just for reference on how crazy bankrupt intelsat is, the 2023 bonds are currently trading at 3% of their par/face value. Stockholders being wiped out is normal, but I don't think I've seen a bankruptcy this extreme before. The equity compensation to creditors seems to be valued at nearly zero by the markets as well. I'm surprised that the company never raised capital from the equity markets to deleverage when it had ample time to do so in the past few years.

[gongora]

Just for reference on how crazy bankrupt intelsat is, the 2023 bonds are currently trading at 3% of their par/face value. Stockholders being wiped out is normal, but I don't think I've seen a bankruptcy this extreme before. The equity compensation to creditors seems to be valued at nearly zero by the markets as well. I'm surprised that the company never raised capital from the equity markets when it had ample time to do so in the past few years.

Intelsat had a massive amount of debt already that was loaded onto the company when it was owned by a series of private equity firms.  Some of the debt holders refused to redeem their holdings at a significant discount when Softbank was trying to merge Intelsat with Oneweb.  Now they'll lose some of their holdings anyway.  They'll still have a good chunk of that debt when they come out of bankruptcy.  If something is trading at 3% it must be lower priority for repayment than the other bonds.

[libra]

Intelsat going down ? it is a non negligible part of space history that would go away... 

[TrevorMonty]

The name may change but company will live on. Much same as Irdium.

[Nomadd]

 I stopped following the MSAT/Skyterra/Lightsquared soap opera years ago. Wasn't Intelsat a heavy investor in Falcone's doomed from the start plan to blanket the US in 4g?
 
 Side note: During the Katrina response, when Iridium and Inmarsat were swamped and Globalstar had already gone seriously downhill, those little MSAT birds were the only reliable comms in the Gulf for weeks. 4800 bps was better voice than Iridium and enough to fax with.
 The old analog cell system was the first to return. We had all kinds of fun running stuff over that. V.32 would sort of work sometimes.
 Damn. Now I'm having Spacefax flashbacks.