Satellite firm gets $900m cash boost from 41pc IPO

NEW YORK - PanAmSat Holding Corp, whose satellites help transmit the broadcasts of CNN and MTV, raised US$900 million ($1.2 billion) in an initial public offering less than a year after being sold to Kohlberg Kravis Roberts & Co.

PanAmSat, based in Wilton, Connecticut, sold 50 million shares at US$18 each, the company said in a Securities and Exchange Commission filing. Earlier, it estimated a range of US$19 to US$21. The largest US-based commercial satellite operator has a market value of US$2.2 billion, based on 122.58 million shares.

About 41 per cent of PanAmSat was sold in the IPO.

Proceeds will be used to pay debt and a US$200 million dividend to shareholders including New York-based KKR, Washington-based Carlyle Group and Rhode Island-based Providence Equity Partners. PanAmSat operates 23 satellites for news organisations such as Time Warner's CNN, the BBC and Viacom's music video channel MTV. Last year the company had a loss of US$79 million on revenue of US$827.1 million.

KKR, a buyout firm co-founded by Jerome Kohlberg, Henry Kravis and George Roberts, bought PanAmSat in April from Rupert Murdoch's DirecTV Group for US$3.53 billion. Buyout firms Carlyle and Providence in June agreed to pay US$953 million each for stakes of about 27 per cent in PanAmSat.

KKR's stake may fall to 25 per cent because Morgan Stanley, Citigroup and Merrill Lynch & Co, which managed the sale, have an option to sell an additional 6 million shares.

Carlyle and Providence Equity Partners will each have 15 per cent stakes once the additional shares are sold.

- BLOOMBERG