Holders of Loral’s existing common and preferred stock still woul...
Holders of Loral’s existing common and preferred stock still would not benefit under a revised plan of reorganization the company plans to file with the bankruptcy court Fri. The company said the revised plan would be filed simultaneously with…
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its disclosure statement. In addition to cancelling old stock without redistributing new stock to shareholders, the old plan (filed Aug. 19) showed the company would have kept existing management and Space Systems/Loral (SS/L) and Loral Skynet debt-free (CD July 23 p16). In the new plan, Loral said it would push its expected emergence from Chapter 11 to first quarter 2005 from 4th quarter 2004. Also, Loral said: (1) Unsecured creditors, including bondholders of Loral and Loral Orion, would hold the common stock of the resulting company, New Loral. (2) New Loral would distribute $200 million in new senior secured notes from Loral Skynet to the unsecured creditors of Loral Orion. They'll also have an opportunity to purchase pro-rata shares of an additional $30 million in senior secured notes from Loral Skynet. (3) Creditors of SS/L, Loral SpaceCom Corp. and Loral Satellite would still exchange debt for equity in the new company, but it would be a combination of cash and stock. Recovery is expected to be about 33%, the company said, although the amount is “subject to significant decrease in the event claims materially exceed current estimates.”