Loral Space & Communications today announced here that it has completed its sale of $300 million of convertible perpetual preferred stock to affiliates of MHR Fund Management LLC ("MHR"), Loral's largest shareholder. It has been known, that the agreement was originally reached in October 2006 and calls for the purchase of $41 million and $259 million of new Loral Space & Communications Inc. 7 ½ percent Series A-1 and Series B-1 convertible perpetual preferred stock, respectively.

The Loral Space & Communications is a satellite communications company. The company excels in owning and operating a fleet of telecommunications satellites, that are used to broadcast video entertainment programming, distribute broadband data, and provide access to Internet services and other value-added communications services. Loral is also acclaimed as an internationally renowned leader especially in the designing and manufacturing of satellites and satellite systems. Its designed and manufactured satellites and satellite systems are being used for commercial and government applications that include direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management.

It has been moreover avowed, that each such share of preferred stock is convertible into ten shares of Loral Space & Communications Inc. common stock or Class B-1 nonvoting common stock, each at an initial conversion price of $30.1504 per share of common stock. The Class B-1 nonvoting common stock shall be issued if Loral manages to attain shareholder approval intended for the creation of this new class of non-voting common stock, which Loral will seek at the next annual meeting of its stockholders. The conversion price reflected a premium of 12 percent to the closing price of Loral's shares of common stock on October 16, 2006, the day before the agreement was announced.

It is to be noted, that further limitations have been placed upon the voting rights of the securities issuable in the event of a change of control where a stock "make-whole" payment is triggered. This has been done following the provisions of the agreement. The provisions required the parties for using their reasonable best efforts to the doggedness of any regulatory objections to the transaction.

Meanwhile to Loral, those holders who elect to convert their shares of preferred stock to a class of common stock anticipating a change of control enabling them to a "make-whole" payment, will receive henceforth non-voting stock as a "make-whole" payment. The non-voting stock received in respect of the "make-whole" payment will not be exchangeable into voting stock absent a shareholder vote specifically approving such exchange, in addition.