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Satellite failure.

Creditors of Satelites Mexicanos (Satmex) filed an involuntary bankruptcy petition in an attempt "to force the troubled Mexican satellite venture to reorganize and restructure US$523 million of overdue debt," Financial Times reported.

The Chapter 11 petition--filed in a bankruptcy court in the Southern District of New York--seeks to have the customary waiting period waived after Satmex first defaulted on payments nearly two years ago.

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Creditors holding two-thirds of the company's debt also hold a debt agreement for up to US$55 million to fund the launch of Satmex's third satellite, which has been in storage in French Guiana for a year-and-a-half. They agreed to offer the money to the satellite so that it could be launched as part of the restructuring agreement, El Universal reported. Satmex has 20 days to respond to the petition (filed on May 25). The court filing follows an unsuccessful debt restructuring negotiation with Mexico's Secretariat of Communications and Transportation.

The satellite company's overall debt is roughly US$800 million and it owes the Mexican government over US$190 million.
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Title Annotation:NEW BUSINESS
Publication:Business Mexico
Date:Jul 1, 2005
Words:177
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