NEW YORK (Bloomberg) ? Loral Space & Communications Inc.?s planned sale of $300 million in convertible preferred stock to MHR Fund Management may lead to a takeover of the satellite company and should be scrapped, according to Murray Capital Management Inc.

Murray, which owns less than five percent of Loral?s stock, sent a letter to Loral?s board today objecting to the proposed stock sale, New York-based Murray said.

Loral, which emerged from bankruptcy in November, wants to sell $300 million of convertible perpetual stock to MHR, its largest shareholder. The proceeds would be used to fund Loral?s expansion plans. Murray?s letter comes a day after Highland Capital Management LP said it opposes the transaction.