Loral Space and Communications has entered into an agreement with affiliates of MHR Fund Management, its largest shareholder, for the latter's purchase of $300 million worth of Loral convertible perpetual preferred stock.
In a statement, Loral said it planned to use the proceeds from this financing, together with its existing resources, to pursue both internal and external growth opportunities in the satellite communications industry, including strategic transactions or alliances.
The agreement with MHR was negotiated through and unanimously recommended by a special committee of Loral's independent directors, which was specially formed to advise the board on Loral's financing alternatives.
'This financing significantly expands Loral's equity base and greatly enhances Loral's ability to grow its business and take advantage of emerging opportunities in both the satellite services and satellite manufacturing markets,' said Michael Targoff, Loral chief executive officer. 'An equity investment of this size is an extraordinary achievement for Loral and it strengthens our ability to play an enhanced role in the satellite industry.'