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.