NEW YORK (Reuters) - Intelsat SA (I.N) on Thursday extended for a second time a deadline for its bondholders to decide whether to accept a haircut on their holdings, a concession necessary for the debt-laden satellite operator’s merger with its peer OneWeb Ltd.
The deadline for a bond swap that would cut creditors’ debt was extended until Monday, May 15, Luxembourg-based Intelsat said. For OneWeb to acquire Intelsat, Intelsat’s bondholders must accept about $3.6 billion (2.7 billion pounds) less than face value on their debt holdings, a condition they have so far been unwilling to accept.
To entice OneWeb to negotiate on a higher bid for their bond holdings, a group of Intelsat debt investors late on Wednesday were planning on putting together a counter-proposal to the current offer, Reuters reported. OneWeb is backed by Japanese telecommunications company SoftBank Group Corp. (9984.T)
Intelsat faces a May 29 deadline to get its bondholders to trim some of the value of its $15 billion in debt, under the terms of its original agreement with OneWeb in February.
The company, a satellite pioneer that broadcasted Neil Armstrong’s moon walk, had agreed to extend the offer to the creditors once before. The offer was previously due to expire April 20.
To consummate a deal with OneWeb, Intelsat needs holders of at least 85 percent of the total face value of each series of its bonds to participate in the exchanges.
Reporting by Jessica DiNapoli; Editing by Paul Simao