United States: Milbank Space Business Review - April 2013

A monthly round-up of space industry developments for the information of our clients and friends.

DISH Bids $25.5b for Sprint

On April 15, DISH Network Corporation (DISH) made an unsolicited offer to acquire Sprint Nextel Corporation (Sprint), the third largest mobile phone and data services provider in the United States, for a purchase price of $25.5b. DISH's offer is 13% higher than another bid for Sprint from Japan's SoftBank Corp. Analysts speculate that DISH's offer may be motivated by the perceived benefits of amassing and combining spectrum holdings, given the pace at which U.S. regulators are making new spectrum available for use by network operators through spectrum auctions authorized by the U.S. Congress more than one year ago. The combination of DISH's spectrum holdings with those of Sprint and Sprint subsidiary Clearwire Corporation would enable a variety of video, data and voice transmission services with broad coverage. Other analysts have speculated that DISH may simply wish to divest certain wireless spectrum that it controls and that its offer to Sprint may be a way of arousing interest among Sprint and other potential customers.

Intelsat Initial Public Offering

On April 17, Intelsat S.A. (Intelsat) sold 19.32m common shares, representing roughly 25% of the company's equity value, through an IPO on the New York Stock Exchange. With an average price of $18 per share, shares sold through the IPO produced $328.8m in net proceeds for Intelsat. On April 18, Intelsat priced its concurrent offering of 3m Series A mandatory convertible junior non-voting preferred shares at $50 per share. The preferred shares will have a 5.75% dividend rate and a liquidation preference of $50 per share and will automatically convert into common shares on May 1, 2016, unless converted earlier. Intelsat has announced that it expects to receive $142.9m in net proceeds from its offering of preferred shares and intends to use the net proceeds from both offerings, an aggregate amount of $471.7m, to pay down existing debt. According to Intelsat, by applying the net proceeds from the offerings to pay down debt and taking other planned measures to deleverage, including refinancing, the company will reduce its current total of $1.25b in annual interest payments by approximately $300m.

April Launch Services

On April 16, International Launch Services successfully launched the Anik G1 satellite for Telesat Canada (Telesat) on an ILS Proton launch vehicle. Manufactured by Space Systems/Loral, Inc. based on its 1300 platform, Anik G1 is equipped with 24 C-, 28 Ku- and 3 X-band transponders and will be co-located with Telesat's Anik F1 satellite at the 107.3°W orbital slot. Anik G1 will provide DTH service to customers in Canada and broadband, voice, data and video services to users in South America, as well as government communications services as the first commercial satellite with X-band coverage of the Americas and Pacific Ocean.

AsiaSat GeoMetWatch Hosted Payload

On April 3, GeoMetWatch Corp. (GeoMetWatch), a Las Vegas-based firm with plans to build and operate six Sounding and Tracking Observatory for Regional Meteorology (STORM") sensors to provide hyperspectral imaging and sounding data for weather forecasting and monitoring, announced that it will launch its first sensor as a hosted payload on a new Asia Satellite Telecommunications Company satellite expected to be launched in 2016 to provide coverage of the Asia Pacific region from the 122°E orbital position. Six countries in the region have signed agreements to purchase the sensor's data, representing more than $200m in annual revenue for GeoMetSat. The company has so far raised almost $6m for its first STORM" sensor, currently being manufactured by Utah State University's Advanced Weather Systems.

Iridium NEXT Developments

On April 24, Iridium Communications Inc. (Iridium) announced an agreement with Harris Corporation (Harris) to provide Harris use of expanded hosted payload capacity on the Iridium NEXT platform, Iridium's secondgeneration constellation scheduled for launch beginning in 2015, in exchange for hosting fees of up to $45m depending on the amount and configuration of the capacity utilized. On April 29, Aireon LLC (Aireon), a joint-venture between Iridium and NAV CANADA, announced a long-term data services contract with NAV CANADA. Aireon will provide spacebased air traffic monitoring services through payloads on the Iridium NEXT satellites.

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