Intelsat Chapter 11 plan confirmation hearing scheduled for Nov. 8

By Sarah Lizee

Olympia, Wash., Oct. 25 – Intelsat SA’s hearing on confirmation of its Chapter 11 plan has been scheduled for Nov. 8, according to a notice filed Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the company said it has achieved the support of key creditor groups on the terms of a comprehensive financial restructuring that would reduce the company’s debt by more than half, to $7 billion from nearly $15 billion.

The plan has the support of holders of about $11 billion, or nearly 75%, of the company’s funded debt. These supporting creditors have also executed a plan support agreement.

According to the amended disclosure statement, the plan provides for the reorganization of the debtors as a going concern with a deleveraged capital structure and sufficient liquidity to fund the debtors’ post-emergence business plan and continue clearing activities to enable the debtors to be eligible for the accelerated relocation payments.

Specifically, the amended plan provides the debtors with a new capital structure consisting of $7.125 billion of new debt, which may include new term loans and new notes that may be fully backstopped by the backstop parties.

The debtors will fully repay the debtor-in-possession facility with proceeds from the new debt.

The equity issuer will issue 96% of the authorized but unissued new common stock to holders of allowed Jackson unsecured claims and 4% to holders of Intelsat Connect Finance (ICF) unsecured claims, each subject to dilution.

The equity issuer will also issue 100% of the series A warrants and 46.4% of the series B warrants to holders of ICF unsecured claims, 6.3% of the series B warrants to holders of SA unsecured claims and 47.3% of the series B warrants to holders of Envision unsecured claims.

Any new common stock issued upon the exercise of the new warrants will be subject to dilution.

The contingent value right (CVR) issuer will issue 100% of the series A CVRs and 67.5% of the series B CVRs to holders of Jackson unsecured claims and 32.5% of the series B CVRs to the holders of ICF unsecured claims.

The amended plan also includes agreement on a standstill on the prosecution of guarantee claims by and among each of the parent guarantors, the Jackson crossover ad hoc group and the HoldCo creditor ad hoc group.

Administrative claims will be paid in full, and priority tax claims will be paid in line with section 1129 of the bankruptcy code.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims, reinstatement of their claims or other treatment leaving their claims unimpaired.

Holders of other priority claims will receive payment in full in cash or other treatment leaving their claims unimpaired.

Intercompany claims and non-debtor intercompany claims will be reinstated or distributed, contributed, set off, settled, canceled and released or otherwise addressed.

Intercompany interests will be reinstated or discharged, canceled, released and extinguished with no distribution.

Holders of term loan facility claims will receive payment in full in cash, as compromised in line with the term loan facility claims settlement.

Holders of 8% first-lien notes claims will receive payment in full in cash of its pro rata share of the full amount of all 8% first-lien notes claims as compromised under the secured creditor settlement.

Holders of 9˝% first-lien notes claims will receive payment in full in cash of its pro rata share of the full amount of all 9˝% first-lien notes claims as compromised in line with the secured creditor settlement.

The company said it plans to complete its restructuring process and emerge from Chapter 11 by the end of the year as a private company with the support of new equity owners. Intelsat said it plans to become publicly traded again at some point in the next five years.

Intelsat is a Luxembourg-based satellite telecommunications company. The company filed bankruptcy on May 14, 2020 under Chapter 11 case number 20-32299.

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