Intelsat will undertake a financial restructuring. The restructuring process is intended to enhance the company’s liquidity and will likely result in a reduction of Intelsat’s legacy debt burden, allowing for Intelsat to emerge with a strengthened balance sheet to complement its operating model and future growth plans.

Alvarez & Marsal is serving as restructuring advisor, Kirkland & Ellis is serving as legal counsel and PJT Partners is serving as financial advisor to the company.

To facilitate the financial restructuring, Intelsat and certain of its subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. Intelsat General, which serves the company’s U.S. commercial, government and Allied military customers, is not part of the Chapter 11 proceedings.

During the restructuring process, Intelsat’s day-to-day operations, engagement with customers and partners, and capital investments will continue as usual. No changes to the company’s operations or workforce are planned.

Intelsat also secured a commitment for $1 billion of new debtor-in-possession financing. Subject to court approval, this debtor-in-possession financing, coupled with cash on hand and cash flow generated by the business, will provide liquidity during the restructuring process to support ongoing operations.

Intelsat is filing a series of customary motions seeking to maintain business-as-usual operations and uphold its commitments to its stakeholders, including employees, customers and vendors, during the restructuring process.

One of the primary catalysts for restructuring the balance sheet now is Intelsat’s desire to participate in the accelerated clearing of C-band spectrum under the Federal Communications Commission order in support of a build-out of 5G wireless infrastructure in the United States. To meet the FCC’s accelerated clearing deadlines and ultimately be eligible to receive $4.87 billion of accelerated relocation payments, Intelsat needs to spend more than $1 billion on clearing activities. These clearing activities must start immediately, long before costs begin to be reimbursed.

“This is a transformational moment in the history of our company,” Stephen Spengler, CEO of Intelsat, said. “Intelsat is the pioneer and foundational architect of the satellite industry. For more than 50 years, we have been respected for quality, innovation, sector leadership and premium services. Our success has come despite being burdened in recent years by substantial legacy debt. Now is the time to change that. We intend to move forward with the accelerated clearing of C-band spectrum in the United States and to achieve a comprehensive solution that would result in a stronger balance sheet. This will position us to invest and pursue our strategic growth objectives, build on our strengths and serve the mission-critical needs of our customers with additional resources and wind in our sails.

“At the end of this process, we will be on stronger financial footing for the future, further enhancing our industry-leading portfolio of space-based communications services and paving the way for our continued innovation and investments to benefit our customers.”

Intelsat is an operator of a satellite fleet and connectivity infrastructure.