Amadeusz Juskowiak

Equatorial communications equa to have losses

Equatorial Communications Co said it expects to report losses of about 57 mln dlrs for the fourth quarter and 68 mln dlrs for the full year 1986 on revenues of about 10 mln dlrs for the quarter and 52 mln dlrs for the year

Equatorial said the losses will include a charge of about 45 mln dlrs from costs associated with the restructuring of its business including adjustments to reflect the market value of transponders owned and leased by Equatorial and other reserves for inventory receivables and excess facilities

Equatorial said the fourth quarter operating results will also include restructuring costs of about 5500000 dlrs in addition to the 45 mln dlr charge

Equitorial also said that as of March One it is operating in technical default under its lease of transponders on the Galaxy III satellite due to its inabiliuty to maintain agreedupon financial ratios It said it is in talks with the lessors in an attempt to restructure lease obligations

Further Equitorial said it is in default of two other oblitations in connection with the purchase or lease of transponders as a result of crossdefault provisions

Equatorial said it has signed a memorandum of understanding for Contel Corp CTC to purchase 10 mln dlrs of Equatorial master earth stations micro earth stations and associated equipment and loan Equatorial six mln dlrs over a sixmonth period for repayment starting in December 1988

The company said Conteol under the agreement would assume a portion of Equatorials rights and obligations under the Galaxy III transponder lease with Burnham Leasing on the occurrence of certain events

Equatorial said it would grant Contel an option to buy about 3600000 common shares at 325 dlrs each

Equatorial said its understandings with Contel are subject to Equatorials ability to restructure a significant portion of its obligations and to obtain concessions from lenders and lessors in particular under its Galaxy III transponder lease It said it hopes to finalize a Contel agreement by April 15

Equatorial in 1985 earned 1807000 dlrs after a 3197000 dlr gain from early debt retirement on revenues of 561 mln dlrs For the first nine months of 1986 the company lost 9476000 dlrs on revenues of 454 mln dlrs compared with a 1784000 dlr profit after the early retirement gain on revenues of 385 mln dlrs

Reuter