Loral agrees to increase ownership of Space Systems/Loral to 100 percent

Business Wire, Feb 24, 1997

NEW YORK--(BUSINESS WIRE)--Feb. 24, 1997--Loral Space & Communications Ltd. (NYSE:LOR) announced today that it has completed negotiations for the acquisition of the remaining 49 percent minority interest in Space Systems/Loral (SS/L), thereby increasing its ownership to 100%. Space Systems/Loral is a world leader in the design, manufacture and systems integration of telecommunications, weather and direct broadcast satellites. Its revenues for the 12-month period ended December 31, 1996, were $1.4 billion with a funded backlog of $1.5 billion.

Loral, which previously had a 51 percent interest in SS/L is to acquire the 49 percent interest held by its four European alliance partners: Aerospatiale, Alcatel Espace, Alenia Spazio S.p.A. and Daimler-Benz Aerospace AG (DASA).

SS/L will now be a wholly owned subsidiary of Loral and its financial results will be fully consolidated with those of Loral.

All of the partners will continue their working relationship with SS/L in the marketing and manufacture of satellites. In exchange for their interest in SS/L, the partners, with the exception of DASA, will receive equity securities in Loral and will retain participation on SS/L's board of directors. DASA elected to receive a cash payment for its interests.

The transaction, which is expected to close within 45 days, is valued at an aggregate $374 million of which approximately $93 million will be paid in cash, $131 million in Loral common stock and $150 million in Loral convertible preferred equivalent obligations.

Bernard L. Schwartz, chairman and chief executive officer of Loral, said: "Space Systems/Loral, which enjoys a reputation for high reliability and technical innovation, is a valuable Loral franchise, central to our long-term strategy to become a leading satellite services provider. This investment serves the company and shareholders well, allowing us not only to consolidate our ownership but to preserve the very productive strategic relationship we have with our partners."

Loral Space & Communications Ltd., headquartered in New York City, is a high-technology company that primarily concentrates in space and communications. The company owns Space Systems/Loral, and is managing general partner and 35 percent owner of Globalstar (NASDAQ:GSTRF), a worldwide satellite-based telecommunications system scheduled to commence commercial operations in 1998. Loral also has a 23 percent interest in K&F Industries.

CONTACT: Loral Space & Communications Ltd.

Jeanette H. Clonan

212/338-5658