On August 21, 2002, an affiliate of Intelsat, Ltd. and Teleglobe Inc. entered into an agreement under which the Intelsat affiliate purchased shares held by Teleglobe in Intelsat for US$65 million and certain commercial arrangements between the companies were revised. The shares will be held by an escrow agent until they are subsequently resold or otherwise distributed. The Intelsat affiliate will receive all proceeds from the sale of the Intelsat shares up to a specified amount, after which Teleglobe would be entitled to receive the remaining proceeds. The transaction has been approved by the Ontario Superior Court of Justice and closed on September 18, 2002.
Teleglobe filed for creditor protection under the Companies’ Creditors Arrangement Act in May 2002. The arrangements between Teleglobe and Intelsat were entered into as part of Teleglobe’s plan to preserve and unlock the value of its core telecom business and to dispose of non-core assets.
Intelsat was represented by Barry Tarshis, Aubrey Kauffman, Samuel Schwartz, Jonathan Fleisher and Jonathan Behar of Goodman and Carr LLP. Teleglobe was represented by Ogilvy Renault, with a team including Derrick Tay, Mario Forte, Ian Ness, Terence Dobbin, Peter Newell, Mark Convery, Adrienne Oliver, Victor Peter and Catherine Vena in Toronto and Christine Dubé in Montreal. Ernst & Young Inc., monitor and escrow agent, was represented by Peter Griffin and Peter Osborne of Lenczner Slaght Royce Smith Griffin.