PanAmSat Maintains Seamless Service for Customers on Galaxy 10R Satellite Following Propulsion System Failure
August 05 2004 - 10:18AM
PR Newswire (US)
PanAmSat Maintains Seamless Service for Customers on Galaxy 10R
Satellite Following Propulsion System Failure No Material Effect to
Services, Revenues or Operations As Galaxy 10R Satellite
Experiences Failure of XIPS Propulsion System WILTON, Conn., Aug. 5
/PRNewswire-FirstCall/ -- PanAmSat Corporation (NASDAQ:SPOT). The
Company is updating current information provided with respect to
its Galaxy 10R satellite, a Boeing model 601 HP spacecraft. Galaxy
10R uses a xenon ion propulsion system ("XIPS"), an electronic
propulsion system that maintains the satellite's in-orbit position,
as its primary propulsion system. On August 3, 2004, the secondary
XIPS on Galaxy 10R experienced an unexpected shutdown, and we have
not been able to restart the system. This event has not affected
service to any of our customers. The primary XIPS on this satellite
had previously failed. The satellite is operating normally on its
backup bi-propellant propulsion system, which has proven to be a
highly- reliable propulsion system with extensive flight
experience. The manufacturer has determined that the secondary XIPS
system has permanently failed. In the absence of the secondary
XIPS, this satellite can operate normally on its available
bi-propellant fuel for over three years. We do not expect this
event to affect service to our customers or to affect revenues from
the customers on this satellite over the remaining life of the
satellite. As a result, there should be no material impact on
services, revenues or operations. In addition, we do not believe
that this event will affect our contracted backlog because the
remaining fuel for the backup bi-propellant propulsion system
should provide ample time to seamlessly transition customers to a
new or replacement satellite and substantially all of our customer
contracts would continue in effect on their terms on such new or
replacement satellite. This event will result in acceleration to
the 2004-2007 timeframe of planned capital expenditures to replace
this satellite. Galaxy 10R is insured and we will make a claim
under its insurance policy. We will use any proceeds to partially
offset the replacement cost. We had already begun construction of
Galaxy 17 as an on-ground spare for Galaxy 16. Upon the successful
launch of Galaxy 16, Galaxy 17 will be available as a replacement
for Galaxy 10R. We also have contractual arrangements in place that
would allow us to procure the construction and launch of an
additional satellite. We operate three other Boeing 601 HP
satellites that continue to operate normally with XIPS as their
primary propulsion system. Two of these satellites have over 6
years of bi-propellant fuel and the third, which also has a more
robust XIPS than its predecessors, has over 11 years of bi-
propellant fuel. Under the terms of the Transaction Agreement for
the sale of PanAmSat, dated April 20, 2004, among Constellation,
LLC, the Company, The DIRECTV Group, Inc. and PAS Merger Sub, Inc.,
the permanent XIPS failure on Galaxy 10R allows the purchasers to
not consummate the transactions contemplated thereby. The
purchasers, including affiliates of Kohlberg Kravis Roberts &
Co. L.P., The Carlyle Group and Providence Equity Partners, Inc.,
are evaluating the impact of the XIPS failure on the transactions
and are working with the Company and The DIRECTV Group to address
the effect of this event. We will hold a conference call at 11:30
a.m. ET on August 5, 2004 to discuss this event. The dial-in number
is 1-800-967-7137 (domestic) or 1-719-457-2627 (international).
About PanAmSat Through its owned and operated fleet of 24
satellites, PanAmSat (NASDAQ: SPOT) is a leading global provider of
video, broadcasting and network distribution and delivery services.
In total, the Company's in-orbit fleet is capable of reaching over
98 percent of the world's population through cable television
systems, broadcast affiliates, direct-to-home operators, Internet
service providers and telecommunications companies. In addition,
PanAmSat supports the largest concentration of satellite-based
business networks in the U.S., as well as specialized
communications services in remote areas throughout the world.
PanAmSat is 80.4 percent owned by The DIRECTV Group Inc. For more
information, visit the Company's web site at
http://www.panamsat.com/. The DIRECTV Group, Inc. The DIRECTV
Group, Inc. (NYSE:DTV) formerly Hughes Electronics Corp. (NYSE:HS),
is a world-leading provider of digital multichannel television
entertainment, broadband satellite networks and services, and
global video and data broadcasting. The DIRECTV Group, Inc. is 34
percent owned by Fox Entertainment Group, which is approximately 82
percent owned by News Corporation Ltd. NOTE: The Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for certain
forward-looking statements so long as such information is
identified as forward-looking and is accompanied by meaningful
cautionary statements identifying important factors that could
cause actual results to differ materially from those projected in
the information. When used in this press release, the words
"estimate," "plan," "project," "anticipate," "expect," "intend,"
"outlook," "believe," and other similar expressions are intended to
identify forward-looking statements and information. Actual results
may differ materially from anticipated results due to certain risks
and uncertainties, which are more specifically set forth in the
"Financial Guidance/Recent Presentations" page of the Investor
Relations section of our website and the Company's annual report on
Form 10-K for the year ended December 31, 2003 on file with the
Securities and Exchange Commission. The risks and uncertainties
that could cause our actual results to differ, include but are not
limited to (i) risks associated with operating our in-orbit
satellites, (ii) risks of launch failures, launch and construction
delays and in-orbit failures or reduced performance, (iii) risk
that we may not be able to obtain new or renewal satellite
insurance policies on commercially reasonable terms or at all, (iv)
risks related to possible future losses on satellites that are not
adequately covered by insurance, (v) risks related to domestic and
international government regulation, (vi) risks related to the
Company's contracted backlog for future services, (vii) risks of
doing business internationally, (viii) risks of inadequate access
to capital for growth, (ix) risks related to competition, (x) risks
related to customer defaults, (xi) risks relating to pricing
pressure and overcapacity in markets in which we operate, (xii)
risks associated with the Company's indebtedness, (xiii) risks
related to control by our majority stockholder and (xiv)
litigation. PanAmSat cautions that the foregoing list of important
factors is not exclusive, and PanAmSat undertakes no obligation to
publicly update any forward-looking statement. Further, PanAmSat
operates in an industry sector where securities values may be
volatile and may be influenced by economic and other factors beyond
the Company's control. DATASOURCE: PanAmSat Corporation CONTACT:
Kathryn Lancioni for PanAmSat Corporation, +1-646-293-7415 Web
site: http://www.panamsat.com/
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