Satellite service provider Intelsat asked a judge to approve a financial restructuring proposal which would allow it to slash its debt by more than half and move to emerge from bankruptcy in the back half of the year.

Under the plan, Intelsat will satisfy certain debtholders’ claims by issuing new stock, with 95 per cent of shares earmarked for creditors with unsecured claims against its Intelsat Jackson subsidiary.

The scheme also includes the expected receipt of up to $4.9 billion in relocation payments covering C-Band spectrum, which the US Federal Communications Commission plans to employ for mobile use.

Intelsat stated the recovery plan would allow it to cut its debt from $15 billion to $7 billion: it said the proposal had backing from creditors holding approximately $3.8 billion of its total.

The company filed for Chapter 11 bankruptcy protection in May 2020.

It requested a court hearing on 17 March. In its court filing, Intelsat noted its mobility business was expected to be a “primary driver” of future growth, tipping the unit’s revenue contribution to grow from 13 per cent in 2019 to 43 per cent in 2026. It is currently working to close an acquisition of commercial aviation assets from in-flight Wi-Fi provider Gogo to beef up the division.