Intelsat filed for Chapter 11 bankruptcy and said it had obtained US$1-billion in new financing that will allow it to keep the satellite service in business while it awaits billions of dollars in proceeds from a government spectrum auction.

To facilitate financial restructuring, Intelsat and some subsidiaries have filed in the US bankruptcy court for the Eastern District of Virginia, the company said on Thursday in a statement.

The filing will allow the satellite operator to address its $14-billion debt load as federal regulators head toward an auction of C-band satellite airwaves for use in 5G wireless networks. Intelsat needs to spend $1.5-billion to $2.5-billion to prepare its spectrum for sale, and it could net as much as $4.8-billion for handing over its C-band by certain deadlines, according to Bloomberg Intelligence.

“We intend to move forward with the accelerated clearing of C-band spectrum in the US and to achieve a comprehensive solution that would result in a stronger balance sheet,” Stephen Spengler, Intelsat CEO, said in the statement.

The operator of the world’s largest satellite fleets said its restructuring “will likely result in a substantial reduction of Intelsat’s legacy debt burden”, and that the company is managing the impact of the Covid-19 crisis on several of its markets.  — Reported by Dave McCombs, (c) 2020 Bloomberg LP