Loral settles dispute with Alcatel, wins funding
Posted: Tue, Jul 1, 2003, 10:46 AM ET (1446 GMT)
Loral Space and Communications announced Monday that it has settled a long-running dispute with satellite manufacturer Alcatel, clearing the way for the company to win a key infusion of funding from Intelsat. Loral agreed to pay Alcatel $5 million now and an additional $8 million within one year to settle a dispute the two companies had about the breakup of a partnership between the two companies. Under the agreement Loral will also transfer its minority interest in Europe*Star and SkyBridge to Alcatel, while Alcatel will transfer its stake in CyberStar to Loral. The agreement cleared the way for Loral to receive a lump-sum payment of $55 million in orbital incentives from Intelsat for spacecraft Loral built for the satellite operator. Loral elected to take a single payment now rather than taking a larger sum over 12 years, as originally planned, because Loral was under pressure from creditors to obtain the money by the end of June. Alcatel, which is also due performance incentives for those satellites, had threatened to block the deal between Loral and Intelsat unless Loral's dispute with Alcatel was settled.
Loral Space and Communications announced Monday that it has settled a long-running dispute with satellite manufacturer Alcatel, clearing the way for the company to win a key infusion of funding from Intelsat. Loral agreed to pay Alcatel $5 million now and an additional $8 million within one year to settle a dispute the two companies had about the breakup of a partnership between the two companies. Under the agreement Loral will also transfer its minority interest in Europe*Star and SkyBridge to Alcatel, while Alcatel will transfer its stake in CyberStar to Loral. The agreement cleared the way for Loral to receive a lump-sum payment of $55 million in orbital incentives from Intelsat for spacecraft Loral built for the satellite operator. Loral elected to take a single payment now rather than taking a larger sum over 12 years, as originally planned, because Loral was under pressure from creditors to obtain the money by the end of June. Alcatel, which is also due performance incentives for those satellites, had threatened to block the deal between Loral and Intelsat unless Loral's dispute with Alcatel was settled.
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