SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
SEPTEMBER 20, 2002
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LORAL SPACE & COMMUNICATIONS LTD.
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(Exact name of registrant as specified in its charter)
ISLANDS OF BERMUDA 1-14180 13-3867424
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(State or other (Commission (IRS Employer Number)
jurisdiction of File Number)
Identification
incorporation)
c/o Loral SpaceCom Corporation
600 THIRD AVENUE, NEW YORK, NEW YORK 10016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 697-1105
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Item 5. OTHER EVENTS.
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On September 20, 2002, Loral Orion, Inc. ("Loral Orion"), a subsidiary
of Loral Space & Communications Ltd. ("Loral" or the "Registrant"), entered into
an agreement with APT Satellite Company Limited ("APT") pursuant to which Loral
Orion would participate on a 50-50 basis in the ownership of the APSTAR-V
satellite.
Loral Orion's purchase price for its 50% interest in the satellite is
$115.1 million, representing 50% of the current estimated cost (the "Project
Cost") of constructing, launching and insuring the APSTAR-V satellite, which
purchase price would be adjusted if the actual Project Cost should be greater or
lesser than $230.2 million. Pursuant to Loral Orion's agreement with APT, Loral
Orion will pay prior to launch $57.55 million for 13.5 transponders on the
satellite. Subject to certain acceleration rights on the part of Loral Orion,
the remaining balance of $57.55 million for the remaining transponders will be
paid in four annual installments as follows: on the second anniversary of the
satellite's in-service date, $10.66 million for 2.5 additional transponders; on
the third anniversary of the satellite's in-service date, $12.79 million for
three additional transponders; and on each of the fourth and fifth anniversaries
of the satellite's in-service date, $17.05 million for four additional
transponders. Title to the transponders will pass to Loral Orion upon its
payment therefor. In addition to the purchase price described above, Loral Orion
has agreed to bear the cost of modifying the footprint of its Ku-band beam on
the satellite.
Under manufacture by Space Systems/Loral, Inc. ("SS/L"), APSTAR-V will
operate a total of 54 transponders, comprised of 24 standard C-band
transponders, 14 extended C-band transponders and 16 Ku-band transponders. Under
this transaction, Loral Orion will obtain title to 12 standard C-band, 7
extended C-band and 8 Ku-band transponders on APSTAR V, which capacity will be
designated Telstar 14. Loral Orion will also have the option to enter into
similar arrangements with APT on replacement satellites upon the end of life of
APSTAR-V.
To be located at 138 degrees East Longitude, APSTAR-V is currently
scheduled to be launched in the third quarter of 2003 and will be capable of
providing Ku-band voice, video and data services to China, India and East Asia,
and broadbeam C-band services throughout the Asia-Pacific region, including
Australia and Hawaii. To ensure a timely launch of APSTAR-V, Loral Orion, APT
and SS/L have agreed that, if a U.S. license to launch APSTAR-V on board a
Chinese Long March rocket has not been secured by September 30, 2002, a Western
launch provider will be used.
This transaction results in a proportionate amount of the APSTAR-V
satellite becoming a self-constructed asset in Loral's consolidated financial
results. Accordingly, there will be a revenue and profit elimination to reflect
this change in the character of the APSTAR-V program.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Loral Space & Communications Ltd.
By: /S/ JANET T. YEUNG
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Name: Janet T. Yeung
Title: Vice President and
Assistant Secretary
Date: September 23, 2002