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    Loral Files for Chapter 11 Bankruptcy Protection (Update2)
    July 15 (Bloomberg) -- Loral Space & Communications Ltd., a satellite maker that hasn't had an annual profit since 1997, filed for Chapter 11 bankruptcy protection, citing a collapse in telecommunications investment.

    Loral said it plans to sell six of its 11 North American satellites to Intelsat Ltd. for as much as $1.1 billion in cash and use the proceeds to pay down debt. The New York-based company filed the papers today in U.S. Bankruptcy Court in Manhattan.

    The satellite maker listed $2.65 billion in assets and $3.06 billion in debt. The satellite industry has been in its worst slump in 40 years primarily because of the collapse of space-based communications projects such as Iridium LLC, Teledesic LLC, and Globalstar Telecommunications Ltd.

    Loral said in a statement that it has enough cash and cash flow to continue operations. It plans to keep five satellites it has in orbit and continue making others for customers.

    Intelsat agreed to order a new satellite from Loral and will make a $100 million down payment on that order upon closing of the sale of the North American satellites, Loral said.

    Loral expects to use most of the proceeds from the sale of the North American satellites to repay its $959 million in secured bank debt.

    The transaction is expected to close within four to six months pending court approval, the company said.

    Deutsche Bank Trust Co., a trustee for bondholders owed $613 million, is listed in the filing as Loral's largest unsecured creditor.

 
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