Loral Space (LORL) to Sell SS/L Unit in $1.01B Deal

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Loral Space & Communications Inc. (Nasdaq: LORL) has entered into a definitive agreement with MacDonald, Dettwiler and Associates Ltd. related to the sale of Loral's wholly-owned subsidiary, Space Systems/Loral (SS/L). The transaction provides for Loral to receive consideration from MDA of US$875 million and cash dividends and other payments from SS/L which are expected to be in excess of US$135 million under a formula described below.

The principal components of the transaction include:

• MDA's purchase of all of the equity of SS/L for US$774 million, payable in cash;
  
  
• MDA's purchase of certain real estate used in connection with SS/L's business for US$101 million, payable through a bank guaranteed three year promissory note;
  
  
• Cash dividends and other payments from SS/L to Loral equal to approximately US$112 million (representing the amount of SS/L's cash balances as of March 31, 2012) plus an incremental per diem amount (equating to approximately US$5.8 million per month) from March 31, 2012 to and including the closing date of the transaction; and
  
  
• The transaction includes other potential adjustments, and Loral will retain principal responsibility for the ViaSat litigation.

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