South Korea orders KT Corp to buy back satellite from Permira-owned ABS

The government claims the satellite - which was launched in 1999 - was sold illegally and must be returned as it is on an orbit licensed to the country under international law. Orbital space is assigned to nations by the International Telecommunications Union, a UN agency, with the number of slots capped to prevent communication interference.

The satellite, called ABS-7, was bought by ABS in May 2010 for KRW20 billion ($18.94 million), shortly before Permira acquired the business. The management buyout was valued in the region of $200 million and provided previous investors ADM Capital and Citi Venture Capital International with a full exit.

Last month South Korea's Science Ministry said the purchase of the satellite was void because the government never approved the sale of the strategic asset. According to Reuters, ABS has reponded by launching arbitration proceedings against KT seeking "a vindication of its rights to ABS-7."

The satellite currently serves Afghanistan, Pakistan, the Middle East and parts of Northwest India with GSM cellular and satellite broadband signals, direct-to-home and cable television broadcasts and government communication, according to the ABS website.

KT Sat, a unit of KT, continues to manage the spacecraft, and had bandwidth rights for its operation last renewed by the South Korean authorities in 2011. The Science Ministry has since canceled some of the bandwidth rights for the satellite.

 

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