CUSIP No. L5140P101
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(1)
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Based on 142,085,774 Common Shares of the Issuer outstanding as of April 1, 2020, as reported in the Issuer’s Proxy Statement filed with the SEC on
April 28, 2020.
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ITEM 1. Security and Issuer.
The class of equity security to which this statement on Schedule 13D relates is the common shares, nominal value $0.01 per share
(“Common Shares”) of Intelsat S.A. (the “Issuer”). The address of the principal executive offices of the Issuer is 4 rue Albert Borschette, Luxembourg, Grand Duchy of Luxembourg L-1246.
Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.
ITEM 2. Identity and Background.
a) The Reporting Persons are:
1. Cyrus Capital Partners, L.P.
2. Cyrus Capital Partners GP, L.L.C.
3. Stephen C. Freidheim
(b) The business address of each of the Reporting Persons is:
c/o Cyrus Capital Partners, L.P.
65 East 55th Street, 35th Floor
New York, New York 10022
(c) Each of the Reporting Persons is engaged in the business of investment. Cyrus Capital Partners, L.P. (“Cyrus Capital Partners”)
is the investment manager of certain private investment funds that directly hold Common Shares, including Cyrus Opportunities Master Fund II, Ltd., CRS Master Fund, L.P., Crescent 1, L.P., Cyrus Select Opportunities Master Fund, Ltd., Canary SC
Master Fund, L.P., and Cyrus 1740 Master Fund, L.P. (collectively, the “Cyrus Funds”). Cyrus Capital Partners GP, L.L.C. (“Cyrus Capital GP”) is the general partner of Cyrus Capital Partners. Stephen C. Freidheim is the Chief Investment Officer of
Cyrus Capital Partners and is the sole member and manager of Cyrus Capital GP. Mr. Freidheim may be deemed to indirectly beneficially own the securities directly held by the Cyrus Funds because Mr. Freidheim may be deemed to have voting and
investment power over such securities by virtue of his relationship with Cyrus Capital Partners and Cyrus Capital GP.
(d) The Reporting persons have not during the last five years been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) The Reporting Persons have not during the last five years been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction nor are the Reporting Persons subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) The Citizenship of the Reporting Persons is as follows:
1. Cyrus Capital Partners – Delaware
2. Cyrus Capital GP – Delaware
3. Stephen C. Freidheim – United States of America
The Reporting Persons have agreed to jointly file this Schedule 13D. A Joint Filing Agreement is filed herewith as Exhibit 99.1.
ITEM 3. Source and Amount of Funds or Other Consideration.
The Reporting Persons used the working capital of the Cyrus Funds to purchase the 10,766,504 Common Shares reported herein. The total
purchase price for the Common Shares reported herein was approximately $12,473,401.11.
The Reporting Persons may effect purchases of securities through margin accounts maintained for the Cyrus Funds with brokers, which
extend margin credit as and when required to open or carry positions in their margin accounts, subject to applicable federal margin regulations, stock exchange rules and such firms’ credit policies. Positions in Common Shares may be held in margin
accounts and may be pledged as collateral security for the repayment of debit balances in such accounts.
ITEM 4. Purpose of Transaction.
The Reporting Persons acquired the Common Shares reported herein over which they exercise beneficial ownership in the belief that the
Common Shares are undervalued and an attractive investment.
Letter to the Board of Directors
On April 30, 2020, Cyrus Capital Partners sent a letter (the “Letter”) to the Issuer’s Board of Directors (the “Board”). Cyrus
Capital Partners in the Letter addresses issues arising out of the Federal Communications Commission Order adopted on February 28, 2020, and formally issued on March 3, 2020 (the “FCC Order”), which reallocated the 3700-4000 MHz band of wireless
spectrum on which the Issuer was licensed to conduct satellite operations, and repurposed it for terrestrial 5G mobile rollout. Cyrus Capital Partners also notes that under the FCC Order, the Issuer will qualify for “accelerated relocation payments”
(“Acceleration Payments”) totaling $4.86 billion if it can meet certain spectrum clearing requirements by two milestone dates in 2021 and 2023.
Cyrus Capital Partners also states that it is aware that Issuer subsidiary Intelsat Jackson Holdings S.A. (“Jackson”) has elected to
withhold an interest payment of approximately $125 million (the “Interest Payment”) due on April 15, 2020, with respect to Jackson’s outstanding 8.50% Senior Notes due 2024. Cyrus Capital Partners understands that such decision regarding the
Interest Payment has prompted negotiations with Jackson creditors about a possible restructuring of existing debt and has fueled speculation of a potential Chapter 11 filing if such negotiations are unsuccessful. Cyrus Capital Partners in the Letter
states that it is confounded by speculation of a Chapter 11 filing by Jackson as it does not believe Jackson is insolvent and believes that Jackson has free cash on hand to make the Interest Payment, access to credit, substantial free cash flow
generation, and liquidity to meet its future debt obligations as they come due.
Cyrus Capital Partners states that the Board has a fiduciary responsibility to maximize the Acceleration Payments and not to permit
any company within the Issuer’s group to undermine value at this critical time. Accordingly, Cyrus Capital Partners states that the Board should immediately undertake the following measures: (1) take all necessary steps to prevent a bankruptcy
filing by the Issuer or its subsidiaries, (2) immediately release all releasable parent guarantees of the debt of the Issuer’s subsidiaries, and (3) fund and capitalize a bankruptcy-remote Issuer company to perform the necessary spectrum clearing and
receive the Acceleration Payments. Cyrus Capital Partners states that it trusts that the Board will undertake such steps, but if it does not, Cyrus Capital Partners will pursue all available means to protect shareholder value, including to request
that the Board call for an extraordinary meeting of shareholders on the earliest possible date permitted by law and the Issuer’s Articles of Incorporation, so that these matters may be put to an immediate vote by the Issuer’s shareholders.
The description of the Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the
Letter, which is filed as Exhibit 99.2, and is incorporated herein by reference.
The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time and at any
time in the future depending on various factors, including, without limitation, the Issuer’s financial position and strategic direction, actions taken by the Board, price levels of the Issuer’s securities, other investment opportunities available to
the Reporting Persons, conditions in the securities market and general economic and industry conditions, take such actions with respect to the investment in the Issuer as they deem appropriate. These actions may include: (i) acquiring additional
Common Shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of the Issuer (collectively, “Securities”) in the open market or otherwise; (ii) disposing
of any or all of their Securities in the open market or otherwise; (iii) engaging in any hedging or similar transactions with respect to the Securities; or (iv) proposing or considering one or more of the actions described in subsections (a) through
(j) of Item 4 of Schedule 13D.
Except as set forth herein, the Reporting Persons do not have present plans or proposals at this time that relate to or would result
in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. Interest in Securities of the Issuer.
(a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D are incorporated herein by reference. Such
information is based on 142,085,774 Common Shares of the Issuer outstanding as of April 1, 2020, as reported in the Issuer’s Proxy Statement filed with the SEC on April 28, 2020.
Set forth below is the aggregate number of Common Shares directly held, as of the date hereof, by each of the following Cyrus Funds.
The Reporting Persons also beneficially own $86,290,000 principal amount of 4.50% Convertible Senior Notes due 2025 of the Issuer
(the “Notes”). The Common Shares issuable upon conversion of such Notes are not included as beneficially owned in this Schedule 13D because the settlement of the Notes may be in cash, Common Shares or a combination of cash and Common Shares, at the
election of the Issuer.
(c) Transactions by the Reporting Persons (on behalf of the Cyrus Funds) effected during the past 60 days are set forth in Schedule A below and such information is incorporated herein by reference.
(d) The disclosure regarding the relationship between the Reporting Persons in Item 2(c) of this Schedule 13D is incorporated by
reference herein.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
The disclosure in Item 5 is incorporated by reference herein.
ITEM 7. Material to Be Filed as Exhibits.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is
true, complete and correct.
May 4, 2020
SCHEDULE A
TRANSACTIONS
The following table sets forth all transactions by the Reporting Persons (on behalf of the Cyrus Funds) with respect to Common
Shares effected in the last 60 days, inclusive of any transactions effected through 4:00 p.m., New York City time, on May 1, 2020. Except as otherwise noted below, all such transactions were purchases of Common Shares effected in the open market, and
the table excludes commissions paid in per share prices.
Exhibit 99.1
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that only one
statement containing the information required by Schedule 13D need be filed with respect to the beneficial ownership by each of the undersigned of the Common Shares of Intelsat S.A.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
EXECUTED as of this 4th day of May, 2020.
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CYRUS CAPITAL PARTNERS, L.P.
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By:
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Cyrus Capital Partners GP, L.L.C.,
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its general partner
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By:
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Name:
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Stephen C. Freidheim
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Title:
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Sole Member/Manager
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CYRUS CAPITAL PARTNERS GP, L.L.C.
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By:
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Name:
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Stephen C. Freidheim
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Title:
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Sole Member/Manager
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STEPHEN C. FREIDHEIM
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Exhibit 99.2
April 30, 2020
Via Electronic Mail
Board of Directors
Intelsat, S.A.
4 rue Albert Borschette
Luxembourg
Grand Duchy of Luxembourg
N4 L-1246
Dear Members of the Board,
Cyrus Capital Partners, L.P. (“Cyrus”, “we”) manages certain investment funds that own and control 9,783,022
common shares of Intelsat S.A. (“Intelsat”).
We write regarding issues affecting Intelsat arising out of the Federal Communications Commission (“FCC”) Order
adopted on February 28, 2020, and formally issued on March 3, 2020 (the “FCC Order”). The FCC Order reallocated the 3700-4000 MHz band of wireless spectrum on which Intelsat was licensed to conduct satellite operations, and repurposed it for
terrestrial 5G mobile rollout. Separately, under the FCC Order, Intelsat will qualify for “accelerated relocation payments” (“Acceleration Payments”) totaling USD 4.86bn if it can meet certain spectrum clearing requirements by two milestone dates
in 2021 and 2023.
At the same time, we are aware that Intelsat Jackson Holdings S.A. (“Jackson”), a subsidiary of Intelsat S.A.,
has elected to withhold an interest payment of approximately USD 125 million (the “Interest Payment”) due on April 15, 2020, with respect to Jackson’s outstanding 8.50% Senior Notes due 2024. We understand that this has prompted negotiations with
Jackson creditors about a possible restructuring of existing debt1 and has fueled speculation of a potential Chapter 11 filing if such negotiations are unsuccessful. This speculation is particularly confounding given that Jackson is not insolvent: It has free cash on hand to make the Interest Payment, substantial free cash flow generation, and liquidity to meet its future debt obligations as
they come due.
It goes without saying that the Acceleration Payments represent a unique and unprecedented value
opportunity for Intelsat. It is the fiduciary responsibility of the Intelsat board to take all steps necessary to maximize the value of the Acceleration Payments and not to permit any company within the Intelsat group to undermine value at this
critical time. Based on information and belief, the Board
____________________________
1 Under the indenture governing the 2024 Senior Notes, Jackson has a 30-day grace period to make the Interest
Payment before such non-payment constitutes an “event of default” with respect to the 2024 Senior Notes.
Board of Directors
Intelsat, S.A.
April 30, 2020
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should immediately undertake the following measures:
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2 For example, Section 10.01(k) of the Indenture governing the 8.50% Jackson Senior Unsecured Notes due 2024 provides: “Any guarantee given
by any Parent of the Issuer may be released at any time upon written notice to the Trustee from such Parent of the Issuer.” Section 10.01(f) further provides: “For the avoidance of doubt, any Parent Guarantee may be released at any time, upon notice to the Trustee, in the sole discretion of the Issuer or such Parent Guarantor”. Similar language is found in the Indentures
governing the other notes.
Board of Directors
Intelsat, S.A.
April 30, 2020
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We trust that the Board recognizes the urgency of the situation and shall undertake these steps immediately. If
it does not, then we shall pursue all available means to protect shareholder value, including to request that the Board call for an extraordinary meeting of shareholders on the earliest possible date permitted by law and Intelsat’s Articles of
Incorporation, so that these matters may be put to an immediate vote by the Intelsat shareholders.
Sincerely,
CYRUS CAPITAL PARTNERS, L.P.
cc: Boies Schiller Flexner LLP
Duane L. Loft (dloft@bsfllp.com)
Cyrus Capital Partners Europe, LLP
Lucien E. Farrell (lfarrell@cyruscapital.com)
Stefano Malfitano (smalfitano@cyruscapital.com)