INTELSAT
Approves Privatization Plan
The INTELSAT
(International Telecommunication Satellite Organization) Assembly of
Parties, representing all 144 member governments, unanimously
approved a plan to privatize INTELSAT.  All
transactions will be completed on 18 July 2001, allowing sufficient
time to meet some members' legislative approval requirements.
Additional capital market transactions should be expected in 2001.
An initial public offering is also expected within one year after
privatization.
The approved plan
transfers substantially all assets, liabilities and operations to a
private, Bermuda-based holding company, known as Intelsat Ltd., and
its 100%-owned subsidiaries. All current and planned C- and Ku-band
satellites, as well as corresponding operating licenses, will be
held by Delaware-based subsidiary and U.S. licensee, Intelsat LLC.
Orbital filings in the Ka, V and BSS frequency bands will be
authorized for use by Intelsat Ltd. by the United Kingdom. The
private company's main service subsidiary will be in Washington,
D.C., in the current INTELSAT Headquarters building. A new,
fiduciary board of directors, with a majority of independents, will
be elected by all shareholders upon privatization.
A
small, separate and independent intergovernmental office to be known
as ITSO (the International Telecommunications Satellite
Organization) will monitor the private company's implementation of
its public service commitments. In accordance with its heritage as a
global satellite communications services provider to all countries,
Intelsat Ltd. will continue to honor a clear set of public service
commitments on a commercial basis. These include the continued
commercial provision of: 1) global coverage and global connectivity;
2) service to "lifeline" customers around the world
according to specific Lifeline Connectivity Obligation Contracts;
and 3) non-discriminatory access to the Intelsat Ltd. satellite
fleet. ISO will continue to exist for at least 12 years after
privatization, but will have no operational role.
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