EchoStar's Hughes Network Systems satellite subsidiary could be the next of its operations to file for bankruptcy.
The Wall Street Journal reports that Hughes could file for bankruptcy within the next few days as the satellite communication provider is due to pay a $1.5 billion debt maturity, which has a deadline of August 1. The report suggests Hughes could file as soon as the weekend without a prenegotiated plan in place to address its debts, according to a person familiar with the situation.
The reports come just weeks after Dish, another EchoStar subsidiary, filed for Chapter 11 bankruptcy protection. EchoStar noted at the time that it was waiting to complete high-profile $23 billion spectrum sales to AT&T and SpaceX, the former of which was completed this week.
As reported by SDxCentral at the time, EchoStar described the bankruptcy protection move as a “prepackaged” filing that implements terms set forth in a previous reorganization filed in March.
Hughes reported that it had only $102 million in cash on hand at the end of its first fiscal quarter of this year. The operator lost around 58,000 satellite broadband subscribers during that quarter, ending the period with approximately 681,000 total connections.
EchoStar warned in a previous 10-Q filing in March that it was unlikely to fulfill its obligations to meet the $1.5 billion debt maturity payment. The latest report notes that there's no grace period on the payment in the event that EchoStar misses the deadline.
Hughes satellites are powered by Jupiter system technology, while its fleet of high-throughput satellites (HTS) supports a range of consumer, small-business, enterprise, in-flight, and mobile services across two continents. The company's fleet of HTS covers the U.S., Mexico, most of Canada, and major parts of Central and South America, according to the company's website.
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