Bankrupt satellite manufacturer and operator Loral Space &Communications has rejected bids fromsatellite-television provider EchoStar Communications and intends to proceed with a series of deals agreed with DirecTV, PanAmSat and Intelsat. The deals are subject to approval at a bankruptcy court hearing scheduled for 21 October, and Loral's North American satellite fleet is almost certain to be auctioned off after EchoStar bid $1.03 billion, topping Intelsat's $1 billion offer.
Hughes Electronics, the parent of DirecTV and majority owner of PanAmSat, has authorised Space Systems/Loral (SS/L) to proceed with the construction of two high-power direct broadcast satellites, DirecTV 8 and 9S, as well as the Galaxy 16 communications satellite, with an option for an in-orbit spare, for PanAmSat. If the deals receive court approval, the satellite operators will advance Loral payments totalling $75 million.
DirecTV 8 will be delivered in the first quarter of 2005, followed in the second quarter by DirecTV 9S. Together the satellites are valued at $220 million. The $100 million Galaxy C/Ku-band satellite will be delivered at the end of 2005. SS/L is already building DirecTV 7S, but is behind schedule and under pressure to deliver the satellite by year-end.
Loral has rejected an offer from EchoStar to acquire DirecTV 7S for $100 million and to authorise the construction of two additional satellites. With debts exceeding $3 billion, bankrupt Loral has also rejected EchoStar's offer of $1.85 billion for the entire company, as well as its separate $1.03 billion bid for the six North American satellites operated by Loral Skynet - one of which, Telstar 7, was declared a total loss last month after a short circuit in its primary power bus.
Source: Flight International
