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):
March 17, 2004
LORAL SPACE & COMMUNICATIONS LTD.
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(Exact name of registrant as specified in its charter)
Islands of Bermuda 1-14180 13-3867424
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) Number)
c/o Loral SpaceCom Corporation
600 Third Avenue, New York, New York 10016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 697-1105
ON JULY 15, 2003, LORAL SPACE & COMMUNICATIONS LTD. AND
CERTAIN OF ITS SUBSIDIARIES FILED VOLUNTARY PETITIONS FOR REORGANIZATION UNDER
CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND PARALLEL INSOLVENCY PROCEEDINGS
IN THE SUPREME COURT OF BERMUDA IN WHICH CERTAIN PARTNERS OF KPMG WERE APPOINTED
AS JOINT PROVISIONAL LIQUIDATORS.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 17, 2004, Loral Space & Communications Corporation,
Loral SpaceCom Corporation and Loral Satellite, Inc. (collectively, the
"Sellers"), each a Delaware corporation and a debtor and debtor in possession
and each a direct or indirect subsidiary of Loral Space & Communications Ltd., a
Bermuda company and itself a debtor and debtor in possession (the "Registrant"),
consummated the sale (the "Sale") of the Sellers' North American fleet of
satellites and related assets to certain affiliates of Intelsat, Ltd., a Bermuda
company ("Intelsat"), and Intelsat (Bermuda), Ltd., a Bermuda company
(collectively, the "Purchasers"). At closing, the Sellers received approximately
$1.011 billion, consisting of approximately $961 million for the North American
fleet and related assets, after adjustments, and a $50 million deposit on a new
satellite to be built for Intelsat by the Registrant's indirect subsidiary,
Space Systems/Loral, Inc., a Delaware corporation and a debtor and debtor in
possession. A portion of these funds were used to repay approximately $967
million of outstanding secured bank debt. In addition, the Sellers are entitled
to receive from the Purchasers approximately $16 million within 30 days of
closing to reimburse a deposit made by the Sellers for the launch of Telstar 8.
The Sale was completed pursuant to the terms of the previously disclosed Asset
Purchase Agreement, dated July 15, 2003 (the "Asset Purchase Agreement"), as
amended by Amendment No. 1, dated August 18, 2003 ("Amendment No. 1"), Amendment
No. 2, dated September 12, 2003 ("Amendment No. 2"), Amendment No. 3, dated
October 21, 2003 ("Amendment No. 3"), and Amendment No. 4, dated March 5, 2004
("Amendment No. 4"), by and among the Sellers and the Purchasers. Consummation
of the Sale was pursuant to a sale order entered on October 30, 2003 by the
Bankruptcy Court for the Southern District of New York following an auction
conducted on October 20, 2003 which resulted in the Purchasers being named the
highest bidder.
The Asset Purchase Agreement, Amendment No. 1, Amendment No.
2, Amendment No. 3 and Amendment No. 4 (collectively the "Amended Asset Purchase
Agreement") are included as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5,
respectively, to this Current Report on Form 8-K and incorporated by reference
herein. The description of the Sale contained in this Current Report on Form 8-K
is qualified in its entirety by reference to the text of the Amended Asset
Purchase Agreement.
Concurrent with the consummation of the Sale, the Registrant,
the Sellers, Loral Orion, Inc., a Delaware corporation and a debtor and debtor
in possession, and Loral Skynet Network Services, Inc., a Delaware corporation
and a debtor and debtor in possession (collectively, the "Loral Noncompetition
Agreement Parties"), entered into a Noncompetition Agreement, dated March 17,
2004 (the "Noncompetition Agreement"), with the Purchasers that prohibits the
Loral Noncompetition Agreement Parties from directly or indirectly engaging in
the business of leasing, selling or otherwise furnishing fixed satellite service
transponder capacity within the United States for a period of two years, subject
to certain exceptions.
The Noncompetition Agreement is included as Exhibit 10.6 to
this Current Report on Form 8-K and incorporated by reference herein. The
description of the Noncompetition
Agreement contained in this Current Report on Form 8-K is qualified in its
entirety by reference to the text of the Noncompetition Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information.
Pro forma condensed consolidated financial statements of the
Registrant, to reflect the events in Item 2, consisting of a pro forma condensed
consolidated balance sheet as of December 31, 2003 and pro forma condensed
consolidated statements of continuing operations for each of the three years in
the period ending December 31, 2003 are included as Exhibit 99.1 to this Current
Report on Form 8-K and are incorporated by reference herein.
(c) Exhibits.
10.1 Asset Purchase Agreement, dated July 15, 2003 by and among
Loral Space & Communications Corporation, Loral SpaceCom
Corporation, and Loral Satellite, Inc. and Intelsat, Ltd. and
Intelsat (Bermuda), Ltd. (incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K, filed by the
Registrant on July 23, 2003).
10.2 Amendment No. 1, dated August 18, 2003, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
10.1 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.3 Amendment No. 2, dated September 12, 2003, to the Asset
Purchase Agreement dated July 15, 2003, by and among Loral
Space & Communications Corporation, Loral SpaceCom
Corporation, and Loral Satellite, Inc. and Intelsat, Ltd. and
Intelsat (Bermuda), Ltd. (incorporated herein by reference to
Exhibit 10.2 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.4 Amendment No. 3, dated October 21, 2003, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
10.3 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.5 Amendment No. 4, dated March 5, 2004, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
2.5.4 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed by the Registrant on March 15,
2004).
10.6 Noncompetition Agreement, dated as of March 17, 2004, by and
among Intelsat, Ltd., Intelsat (Bermuda), Ltd., Loral SpaceCom
Corporation, Loral Satellite, Inc., Loral Space &
Communications Corporation, Loral Space & Communications Ltd.,
Loral Orion, Inc., and Loral Skynet Network Services, Inc.
99.1 Pro forma condensed consolidated financial statements of the
Registrant, to reflect the events in Item 2, consisting of a
pro forma condensed consolidated balance sheet as of December
31, 2003 and pro forma condensed consolidated statements of
continuing operations for each of the three years in the
period ending December 31, 2003.
SIGNATURE
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 thereunto duly authorized.
Date: April 1, 2004 LORAL SPACE & COMMUNICATIONS
LTD. (Registrant)
By: /s/ Richard J. Townsend
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Name: Richard J. Townsend
Title: Executive Vice President and Chief
Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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10.1 Asset Purchase Agreement, dated July 15, 2003 by and among
Loral Space & Communications Corporation, Loral SpaceCom
Corporation, and Loral Satellite, Inc. and Intelsat, Ltd. and
Intelsat (Bermuda), Ltd. (incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K, filed by the
Registrant on July 23, 2003).
10.2 Amendment No. 1, dated August 18, 2003, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
10.1 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.3 Amendment No. 2, dated September 12, 2003, to the Asset
Purchase Agreement dated July 15, 2003, by and among Loral
Space & Communications Corporation, Loral SpaceCom
Corporation, and Loral Satellite, Inc. and Intelsat, Ltd. and
Intelsat (Bermuda), Ltd. (incorporated herein by reference to
Exhibit 10.2 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.4 Amendment No. 3, dated October 21, 2003, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
10.3 to the Current Report on Form 8-K, filed by the
Registrant on October 30, 2003).
10.5 Amendment No. 4, dated March 5, 2004, to the Asset Purchase
Agreement dated July 15, 2003, by and among Loral Space &
Communications Corporation, Loral SpaceCom Corporation, and
Loral Satellite, Inc. and Intelsat, Ltd. and Intelsat
(Bermuda), Ltd. (incorporated herein by reference to Exhibit
2.5.4 to the Annual Report on Form 10-K for the fiscal year
ended December 31, 2003, filed by the Registrant on March 15,
2004).
10.6 Noncompetition Agreement, dated as of March 17, 2004, by and
among Intelsat, Ltd., Intelsat (Bermuda), Ltd., Loral SpaceCom
Corporation, Loral Satellite, Inc., Loral Space &
Communications Corporation, Loral Space & Communications Ltd.,
Loral Orion, Inc., and Loral Skynet Network Services, Inc.
99.1 Pro forma condensed consolidated financial statements of the
Registrant, to reflect the events in Item 2, consisting of a
pro forma condensed consolidated balance sheet as of December
31, 2003 and pro forma condensed consolidated statements of
continuing operations for each of the three years in the
period ending December 31, 2003.