PARIS -- Intelsat has secured replacement capacity for all priority customers affected by the sudden failure Nov. 28 of its IA-7 satellite by moving them to other Intelsat satellites and booking emergency capacity aboard a satellite operated by competitor PanAmSat Corp., Intelsat's investor relations manager said Nov. 29.
Dianne VanBeber said some IA-7 customers with what are known as pre-emptible contracts -- lower-priced leases in which replacement capacity is not guaranteed - may still be facing difficulties as a result of the IA-7 failure.
Located at 129 degrees west longitude, IA-7 had showed no signs of difficulty until early in the morning of Nov. 28, when its electrical-distribution system suddenly failed. VanBeber said that while the satellite since then has shown some signs of life, "we are considering it a total loss. We are still investigating the cause, and at this point we don't even have a smoking gun."
The IA-7 in-orbit insurance policy was allowed to expire in September. As it has done in the past, Intelsat chose not to renew the policy because the satellite's book value had dropped to below $150 million.
The failure of IA-7 will permit private-equity consortium Zeus Holdings Ltd., which had agreed to purchase Intelsat for $3 billion plus assuming $2 billion in Intelsat debt, to reconsider the terms of the deal with a view to reducing the purchase price or even canceling it altogether. "We will be reviewing this with Zeus in the next few days," VanBeber said.
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