SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 14, 1996
COMSAT Corporation
(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification)
6560 Rock Spring Drive, Bethesda, MD 20817
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (301) 214-3000
Not applicable.
(Former name or former address, if changed since last report).
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Item 5. Other Events
On February 15, 1996, COMSAT Corporation (the "Corporation"
or "COMSAT") announced that it had reached agreement with the
U.S. Government on a joint proposal for restructuring the
International Telecommunications Satellite Organization
(INTELSAT). The proposal recommends the division of INTELSAT
into two separate entities through the creation of a new INTELSAT
affiliate company.
The proposal calls for INTELSAT's assets, including
satellites, to be divided almost evenly between the existing
organization and the new affiliate company. The existing
intergovernmental organization would continue to provide basic
public network services as a cooperative. Under the proposal,
the new affiliate company would be publicly financed, would
pursue new commercial opportunities on a competitive basis and
would operate without the special obligations, privileges and
immunities associated with the present INTELSAT organization.
The proposal contemplates, assuming the existence of appropriate
market conditions, that (i) the present INTELSAT organization
initially would own all of the stock in the new affiliate
company; (ii) 60 percent of the stock of the affiliate would be
sold to external investors within one year of the affiliate's
creation; (iii) an additional 20 percent of the affiliate's stock
would be sold during the next two years; and (iv) all shares that
are not sold to external investors would be distributed to
current investors in INTELSAT as repayment of investor capital.
COMSAT stated that it plans to work with the U.S. Government
to convince other members of INTELSAT that the proposal should be
adopted. COMSAT expressed its hope that a consensus on the
proposal could be achieved and that the proposal could be
presented for adoption at the next INTELSAT Assembly of Parties
in 1997 and implemented following that meeting. The Assembly of
Parties is the meeting of 136 governments which are members of
the INTELSAT consortium. A vote of two-thirds of the member
governments is necessary for approval of the proposal.
On February 14, 1996, the Corporation announced that the
launch of the INTELSAT 708 satellite on the China Long March 3B
vehicle had failed. The satellite was to have been positioned at
the 310 degrees East orbital location. The Corporation stated
that the INTELSAT 707 satellite, due to be launched on March 2
aboard the Ariane 44LP, was expected to take the place of the 708
in satisfying customers' requirements. COMSAT also stated that
it was fully insured against loss as a result of the failure.
However, the capital costs associated with the destroyed
satellite will be excluded from COMSAT's rate base for
jurisdictional rate-making purposes, resulting in a potential
reduction of earnings capacity.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
COMSAT Corporation
By:/s/ Alan Korobov
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Alan Korobov
Controller
Date: February 23, 1996
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