Appaloosa LP, which beneficially owns approximately 7.4% of Intelsat´s (NYSE: I) common stock, has sent a letter to Intelsat´s board of directors urging the company to withhold acceptance of the Federal Communications Commission´s (FCC) Order detailing the FCC´s approach to clearing C-band spectrum in an upcoming auction until fair commercial terms can be negotiated, the company said.
The company said the “terms impose upon Intelsat the full weight of financial and execution risks related to a process that is likely to yield benefits for the FCC and US Government many times greater than those afforded the company. For a highly leveraged operator, such as Intelsat in particular, the cash required to conduct that process imposes a hardship that could easily trigger an insolvency before relocation can be accomplished.”
“We urge you to withhold acceptance pending negotiation of an agreement with the FCC on fair commercial terms. Failing that, we believe the Board has no choice but to resort to bankruptcy and litigation in order to protect Intelsat´s valuable license rights from an illegal modification.”