Satellite needed to restore financial footing
MEXICO CITY — Troubled Mexican sat company Satmex has signed a deal with European launch company Arianespace to place a long-warehoused bird in orbit by late spring.
The Satmex 6 satellite is badly needed to help put the company back on solid financial footing. Satmex will begin bankruptcy proceedings in Mexico after sparring with U.S. creditors, which want to go to court Stateside.
Satmex, half-owned by Loral Space & Communications, defaulted on $523 million in U.S.-held bonds and its Mexican owners owe $188 million to the Mexican government, which owns a 24% stake.
Satmex said the estimated $55 million launch will be paid for with money from its coffers.
“It’s amazing how much cash you can accumulate when you aren’t servicing your debt,” said Jim Harper, chief analyst at BCP Securities, a Connecticut-based firm specializing in emerging market debt.
Harper said the new satellite would allow Satmex to more than double its revenue stream and help turn around the firm. “They still need to win some concessions from creditors,” he said.
Firm has until Oct. 31 to provide U.S. creditors with a plan to restructure its debt. If it misses the deadline, creditors could haul the company back into a U.S. court.
Satmex has faced increasing competition in recent years in Mexico, formerly its captive market, recently losing big clients like TV Azteca to PanAmSat.