Sea Launch's plan of reorganization confirmed; break-up fee approved

By Lisa Kerner

Charlotte, N.C., July 27 - Sea Launch Co., LLC's plan of reorganization was confirmed by the U.S. Bankruptcy Court for the District of Delaware on Tuesday, according to an attorney close to the case.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and priority claims will be paid in full in cash;

• Debtor-in-possession facility claims will be either paid in full in cash from proceeds of the exit financing or be converted into new common stock;

• Other secured claims will be reinstated;

• Holders of current trade vendor unsecured claims will recover 17.5% in cash from exit financing proceeds;

• Holders of non-insider general unsecured claims, Aker and Boeing claims and Yuzhmash and Yuzhnoye claims will receive a share of creditor trust equity interests;

• Holders of Energia claims will receive a share of $28.8 million in preferred shares of reorganized Sea Launch in exchange for allowed partner currency control claims and a share of creditor trust equity interests in exchange for allowed partner claims;

• Holders of Sea Launch equity interests will receive no distribution; and

• Holders of subsidiary interests will retain their interests.

Break-up fee, reimbursement OK'd

Also on Tuesday, the court approved Sea Launch's payment of a break-up fee and expense reimbursement in connection with its $355 million exit financing commitment from debtor-in-possession financing lender Energia Overseas Ltd. Russia, the attorney said.

As previously reported Sea Launch agreed to pay Energia a $3.1 million break-up fee if it chooses another financing proposal or sells its assets to someone other than the proposed lender.

Sea Launch would also reimburse up to $1.3 million of Energia's expenses.

Under the exit commitment, Energia has agreed to provide a $155 million equity investment and a $200 million revolving loan.

Sea Launch, a Long Beach, Calif., heavy-lift satellite commercial launch service provider, filed for bankruptcy on June 22, 2009. Its Chapter 11 case number is 09-12153.

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