CONFIDENT LORAL WAITS FOR CHINASAT 8 APPROVAL

Loral CEO Bernard Schwartz expressed confidence State Dept. finally would approve sale of ChinaSat 8 communications satellite, following months of delay. In briefing at Satellite 2001 in Washington, Schwartz said he was “more optimistic now than I was before,” deal would go through, citing change in Administration: “The new Administration relieves the focus on the political issues to some degree. It’s a more favorable climate.” State Dept. spokesman had no comment.

State Dept. decision Jan. 4 not to act on Loral application had more to do with change in Administration than with merits of case, State Dept. spokesman said, and Loral considers decision not to make a final decision as positive sign. Loral may have to refund up to $134 million and face penalties of $11 million if sale doesn’t go through, but Schwartz said “our buyer continues to be very patient. They want the satellite,” which is to be used for broadcast and data transmission.

Schwartz admitted company had operated under cloud caused by scrutiny of criminal accusations on whether classified secrets were passed illegally to China following failed launch of Loral satellite in 1996. China Telecom Bcst. Satellite Corp. bought $200 million satellite with plan to launch it on Chinese Long March Rocket. House subcommittee looking into allegations concluded that China had used launches of satellites manufactured by U.S. companies to gain illegal access to information to help its military missile program.

“I don’t believe we did anything wrong,” Schwartz said. ChinaSat 8 case ultimately led to shift of oversight for satellite exports to State Dept. from Commerce. Schwartz said he believed U.S. satellite industry had been severely damaged and govt. should address issue immediately by providing some kind of relief. “It’s criminal, in my judgment,” he said: “Something has to be done to repair the process.”