McLean satellite operator Intelsat files for bankruptcy
Company faces $15B debt burden
McLean-based satellite operator Intelsat Corp. announced Friday it has filed for Chapter 11 bankruptcy protection, as it faces a $15 billion debt burden.
“Our success has come despite being burdened in recent years by substantial legacy debt,” Intelsat CEO Stephen Spengler said in a statement. “Now is the time to change that.”
Intelsat said in a release that part of the reason for the bankruptcy filing was to spend money on a program that would allow it to build 5G infrastructure under the Federal Communications Commission order in support of a build-out of 5G wireless infrastructure in the U.S., known as the 5G Fast Plan. The company has to clear its C-band spectrum in order to support 5G, which offers faster data rates and fewer delays in transmitting data.
The clearing project will cost Intelstat $1 billion to meet FCC deadlines and will make the company eligible to receive $4.87 billion in accelerated relocation payments.
“We intend to move forward with the accelerated clearing of C-band spectrum in the United States and to achieve a comprehensive solution that would result in a stronger balance sheet,” Spengler said in a statement. “This will position us to invest and pursue our strategic growth objectives, build on our strengths and serve the mission-critical needs of our customers with additional resources and wind in our sails.”
Intelsat and some of its subsidiaries have filed Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. The company said its day-to-day operations will continue as usual.
“At the end of this process, we will be on stronger financial footing for the future, further enhancing our industry-leading portfolio of space-based communications services and paving the way for our continued innovation and investments to benefit our customers,” Spengler said in a statement.
Intelsat was founded in 1964 and provides video and broadband services.