Sec Form 13D Filing - CYRUS CAPITAL PARTNERS L.P. filing for Intelsat S.A. (INTEQ) - 2020-05-04

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

Intelsat S.A.

(Name of Issuer)

Common Shares, nominal value $0.01 per share

(Title of Class of Securities)

L5140P101

(CUSIP number)

Jennifer M. Pulick

General Counsel

Cyrus Capital Partners, L.P.

65 East 55th Street, 35th Floor

New York, New York 10022

(212) 380-5800

(Name, address and telephone number of person authorized to receive notices and communications)

April 27, 2020

(Date of event which requires filing of this statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box.  ☐

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. L5140P101

 

CUSIP No. L5140P101

 

---

CUSIP No. L5140P101

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.

 

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.

 

	CYRUS CAPITAL PARTNERS, L.P.
	By:		Cyrus Capital Partners GP, L.L.C.,
			its general partner
	By:		/s/ Stephen C. Freidheim
	Name:		Stephen C. Freidheim
	Title:		Sole Member/Manager
	CYRUS CAPITAL PARTNERS GP, L.L.C.
	By:		/s/ Stephen C. Freidheim
	Name:		Stephen C. Freidheim
	Title:		Sole Member/Manager
	/s/ Stephen C. Freidheim
	STEPHEN C. FREIDHEIM

Exhibit 99.2