EchoStar-owned Hughes Satellite Systems has admitted it does not have funding in place to cover its next 12-months activity. It has a $1.5 billion (€1.29bn) borrowing obligation to repay in August, and says one option is to declare Chapter 11 bankruptcy.

Hughes has a declining asset in the form of 783,000 subscribers to its Jupiter 3 Ka-band satellite, launched in December 2023. Jupiter 3, also known as EchoStar 24, is owned by EchoStar and Hughes pays EchoStar $190 million annually to lease its capacity. The costs emerged in a SEC filing made by Hughes on November 14.

The filing revealed that as a result of the recent $17 billion sale of spectrum by EchoStar to SpaceX there is an obligation to refer existing HughesNet subscribers and customers to SpaceX’s Starlink. There are also options for SpaceX to acquire satellites and regulatory assets from Hughes and EchoStar.

Hughes is sitting on $119 million in cash and other receivable assets but $1.5 billion in debt that matures in August 2026.

Hughes, in its SEC filing, says it can no longer rely on EchoStar’s cash to aid its own liquidity problems.

“Because the SpaceX Transactions […] are signed at our parent and/or its subsidiaries, we do not expect completion of the SpaceX Transactions to resolve our going concern qualification,” Hughes noted “In addition, our parent, EchoStar, may not provide additional liquidity in the future necessary to meet our obligations as they come due.”

“Because we do not currently have the necessary cash on hand and/or projected future cash flows or committed financing to fund our obligations, including our debt maturities, for at least twelve months, substantial doubt exists about our ability to continue as a going concern,” added Hughes.

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Tags: chapter 11, Echostar, Hughes