EQUATORIAL COMMUNICATIONS <EQUA> TO HAVE LOSSES
Equatorial Communications
Co said it expects to report losses of about 57 mln dlrs for
the fourth quarter and 68 mln dlrs for the full year 1986 on
revenues of about 10 mln dlrs for the quarter and 52 mln dlrs
for the year.
    Equatorial said the losses will include a charge of about
45 mln dlrs from costs associated with the restructuring of its
business, including adjustments to reflect the market value of
transponders owned and leased by Equatorial and other reserves
for inventory, receivables and excess facilities.
    Equatorial said the fourth quarter operating results will
also include restructuring costs of about 5,500,000 dlrs, in
addition to the 45 mln dlr charge.
    Equitorial also said that as of March One it is operating
in technical default under its lease of transponders on the
Galaxy III satellite due to its inabiliuty to maintain
agreed-upon financial ratios.  It said it is in talks with the
lessors in an attempt to restructure lease obligations.
    Further, Equitorial said it is in default of two other
oblitations in connection with the purchase or lease of
transponders as a result of cross-default provisions.
    Equatorial said it has signed a memorandum of understanding
for Contel Corp <CTC> to purchase 10 mln dlrs of Equatorial
master earth stations, micro earth stations and associated
equipment and loan Equatorial six mln dlrs over a six-month
period for repayment starting in December 1988.
    The company said Conteol, under the agreement, would assume
a portion of Equatorial's rights and obligations under the
Galaxy III transponder lease with <Burnham Leasing> on the
occurrence of certain events.
    Equatorial said it would grant Contel an option to buy
about 3,600,000 common shares at 3.25 dlrs each.
    Equatorial said its understandings with Contel are subject
to Equatorial's ability to restructure a significant portion of
its obligations and to obtain concessions from lenders and
lessors, in particular under its Galaxy III transponder lease.
It said it hopes to finalize a Contel agreement by April 15.
    Equatorial in 1985 earned 1,807,000 dlrs after a 3,197,000
dlr gain from early debt retirement on revenues of 56.1 mln
dlrs. For the first nine months of 1986, the company lost
9,476,000 dlrs on revenues of 45.4 mln dlrs, compared with a
1,784,000 dlr profit after the early retirement gain on
revenues of 38.5 mln dlrs.
 Reuter
