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K.C. NEEL
Flying into the broadband delivery game, Pegasus Communications is forming a broadband unit that will offer satellite-based high-speed Internet access services for both the TV and personal computer.
The "Pegasus Express" service will be introduced at the Consumer Electronics Show in January. The company also plans to launch interactive GV services in targeted markets beginning late this year.
The formation of a separate division for broadband was part of a reorganization of the company announced at the same time as disappointing earnings.
Under Pegasus' reorganization, the company's existing DBS business will be retained by Pegasus Communications, which will be renamed Pegasus Satellite Communications. Pegasus Satellite also will hold Pegasus' broadcast television business. As a result of the reorganization, Pegasus Satellite will become a direct subsidiary of the new holding company.
Pegasus' other assets, including intellectual property rights licensed from Personalized Media Communications, will be held by other direct of the new holding company. Pegasus sold its 57,000-subscriber cable system in Puerto Rico to Centennial Communications for $170 million in September.
As a result of the reorganization, all the capital stock of the existing Pegasus Communications, including its Class A Common Stock and preferred stock, will be exchanged for shares of the new holding company. The Class A common stock of the new holding company will trade on the NASDAQ National Market under the symbol "PGTV." Pegasus Communications' existing debt will remain obligations of Pegasus Satellite. The company anticipates that the reorganization, which is subject to regulatory approval, will be completed before year's end.
Pegasus reported a second-quarter loss of $72.3 million, or $1.48 a share, last week. That compares to a $48.7-million loss - or $1.24 a share - for the same period a year ago.
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