Satmex Declares Total Loss of Solidaridad 1

Mexican satellite operator Satmex yesterday declared its Solidaridad 1 satellite a total loss following the failure of an onboard back-up control processor on August 27. Solidaridad 1, which was built by Hughes Space & Communications and launched in 1994, experienced a failure of its primary control processor in April 1999, and had been operating on its back-up processor since that time. Satmex has been migrating Solidaridad 1's customers to other Satmex satellites or to satellites operated by Loral Skynet, which like Satmex is a member of the Loral Global Alliance. These alternative satellites have sufficient capacity to provide for all Solidaridad 1 customers, and as of yesterday 86% of all utilized capacity and 95% of all users had been successfully migrated or assigned. Solidaridad 1 was insured for US$250mn, and Satmex intends to apply the insurance proceeds towards the construction and launch of a replacement satellite as well as for debt service. Satmex is a joint venture between Loral, Mexican holding company Principia, and Mexico's government. It currently operates two satellites, Solidaridad 2 and Satmex 5, delivering voice, data and video services to Latin America.