Intelsat SA is considering a possible chapter 11 bankruptcy filing if U.S. regulators don’t increase the amount of compensation the company would receive for giving up some of its airwaves, Bloomberg News reported. Intelsat has hired bankruptcy experts at Kirkland & Ellis LLP to prepare for possible restructuring. Intelsat plunged as much as 34 percent to $2.61 before trading was paused for volatility. Intelsat bonds led high-yield declines, as its 9.5 percent notes due in February 2023 fell 12.3 cents on the dollar to about 50 cents, yielding about 39 percent. The chapter 11 filing would delay the U.S. Federal Communications Commission plan to move forward with an auction of the so-called C-band airwaves because Intelsat assets would be entangled in court proceedings. FCC Chairman Ajit Pai today is to announce his plans for an auction of C-band airwaves currently used by satellite providers, and a leading issue is how much to pay satellite providers including Intelsat and SES SA. The frequencies would be reallocated to mobile service providers. There’s been criticism in Congress over the prospect of high payments for the two providers, which are based in Luxembourg, for a sale of U.S. airwaves.
