Loral Loses Satellite Scheduled to Be Sold

The Associated Press ^ | Sept 22, 2003 | Ellen Sheng

[Liz]

NEW YORK (Dow Jones/AP) - After failing to re-establish contact with an orbiting telecommunications satellite over the weekend, Loral Space & Communications declared it a total loss Monday.

Telstar 4, which was insured for $141 million, was one of six satellites - three currently in orbit and two under construction - that privately held Intelsat had agreed to acquire for up to $1.1 billion.

New York-based Loral lost contact with the satellite Friday morning when a short circuit disrupted operations.

Despite the failure, Intelsat and Loral still expect the acquisition to occur on schedule, but the incident could reduce the purchase price by $141 million - the insured amount.

Susan Gordon, a spokeswoman for Intelsat, said that the purchase price could be reduced by any insurance payment minus any service reduction payments that Loral might make to customers.

The final purchase price could be further reduced if Loral fails to meet certain goals.

Loral filed for bankruptcy on July 15 as part of its deal to sell its assets to Intelsat, listing $2.65 billion in assets and $3.06 billion in debt. Though Intelsat is the lead bidder, the bankruptcy court is accepting bids for Loral's assets until Oct. 15. An auction is scheduled for Oct. 20.

Telstar 4, which covered all 50 states, Puerto Rico and the U.S. Virgin Islands and southern Canada, was launched in 1995 and was scheduled to be to be replaced by Telstar 8 in mid-2004. "Nearly all" customers using Telstar 4 have been shifted to neighboring Telstar 5, 6 and 7 satellites, Loral said.

Like many other out-of-service satellites, Telstar 4, which orbits at 22,000 miles above earth, will now be left to drift in space. Companies are usually required to leave just enough fuel in their satellites allowing them to rocket into deep space at the end of service. But given that Loral has not been able to re-establish contact with its satellite, that is probably not an option.

AP-ES-09-22-03 1835EDT

[GOP_1900AD]

Boo hoo... the traitors selling off the store.... too bad this is the only justice being serviced (i.e. "karmic") I was always hoping for some perp walks. What they have done is far worse than the Falcon and the Snowman.

[Ronin]

Check the freighters heading for Beijing and advise the insurance company to hold off on paying any claims for a while.

[Ronin]

Opps. Pardon my post. I need to read the articles before I stick my foot in my mouth. I assumed it was on the ground and lost in transit.

[George from New England]

You maybe right in the end...

Knowing how Loral cow-tows to china you maybe right about who actually has control. Wanna bet that the Chinese are now controlling the "lost" satelite?

[tet68]

See, this is where Bubba and his brother Frank could cobble together that old atlas/centaur they bought at the army suplus along with Franks old scuba gear, go up and get that sucker and haul it back to the home place and see if they could find the short.

"Uh........Loral? We'un got yo satelite and Frank even made some improvments like it makes coffee now and the reception is ril goot too......."

[Cicero]

What goes around comes around. Tough.