Comsat Corporation has issued a statement praising Intelsat's plan to spin off six Intelsat satellites into a separate, publicly traded company — known as INC — that will operate as a fully commercial, competitive company serving the worldwide satellite communications market.
The Intelsat Working Party meeting in Washington this week has recommended
this structure to the Intelsat Assembly of Parties, which is anticipated to
approve the INC spin-off when it meets March 30 through April 1.
Intelsat, an international treaty organization with 142 member nations,
was established in 1964 to develop an international satellite communications
network to deliver services to all parts of the world. Comsat, a publicly
traded company, is the U.S. Signatory to Intelsat.
“This milestone is an important first step toward the goals we set last
year,'' said Comsat President and CEO Betty C. Alewine. “The proposed transfer of these satellites to INC will allow a market valuation to be applied to these satellites for the first time, to the benefit of Comsat's shareholders.'' Comsat will own approximately 16% of INC stock and be the largest single shareholder when INC is formed.
“This plan demonstrates the ability of Intelsat members and government
representatives to negotiate a pro-competitive commercial restructuring,''
Alewine continued. “We applaud them for demonstrating that a commercial
restructuring can be accomplished through cooperative efforts.''
INC will be incorporated in the Netherlands. Intelsat plans to submit
initial articles of association for INC to the Netherlands government for
review in the very near future, and a search is already underway for INC's
chief executive officer.
Final organizational documents needed to create INC will be presented to
the Intelsat Assembly of Parties at its March 30 meeting. Once approved by
the Assembly, INC will be formally organized, and the affiliate's commercial
operations will commence. INC will maintain an “arm's length'' relationship with Intelsat for all business transactions, and will have employees, officers, directors and headquarters completely separate from Intelsat. INC is anticipated to become publicly traded in 1999, and will have no privileges or immunities. The details of Intelsat's waivers of immunities in relationship to INC need to be resolved in order for complete agreement to be reached.
“We have made remarkable progress in the Intelsat restructuring effort,
working toward the achievable goal of pro-competitive privatization and fully commercial operations. The success of the INC spin-off plan clearly
demonstrates that the most effective way to continue this progress and fully
privatize Intelsat into a commercial satellite services provider is through
cooperative negotiations,'' Alewine concluded.
Some of the statements in this news release are forward-looking. Forward-
looking statements are based on Comsat management's current expectations and
assumptions, which may be affected by the timing and outcome of pending
regulatory and legislative actions and by subsequent developments and business conditions, and necessarily involve risks and uncertainties. Therefore, there can be no assurance that actual results will not differ materially from anticipated results. Readers should refer to Comsat's disclosure documents filed with the Securities and Exchange Commission, including the corporation's 1996 Form 1O-K and the Form 0-Q for the first, second and third quarters of 1997 for specific details on some of the factors that may affect operating results.
Comsat Corporation is a global provider of satellite services and digital
networking services and technology.
Intelsat'S Spin-Off Plan
