(Bloomberg) ? Intelsat Ltd., the second-largest global satellite operator, will record ?substantial? expenses in the fourth quarter after writing down the value of a malfunctioning satellite.

Intelsat will have non-cash costs on a satellite that had a book value of $137 million in September, the Pembroke, Bermuda- based company said in a filing with the US Securities and Exchange Commission. Zeus Holdings Ltd. agreed in August to buy Intelsat, which transmits communications, for $3 billion.

As it completes an investigation into the causes of the malfunction, Intelsat is delaying the launch of another satellite. Zeus has an option to scrap the deal if losses associated with the satellite aren?t remedied. Intelsat spokeswoman Dianne Vanbeber said the transaction will proceed.

?Zeus is satisfied,? Vanbeber said in an interview. ?They?ve been involved with the discussion? on the costs for writing down the satellite, she said.

Intelsat is working with Zeus on a debt offering scheduled for later this week to raise money for the buyout, Vanbeber said.

Zeus was formed by New York-based Apollo Management LP and three other buyout firms that agreed in August to take over Intelsat, which as of August was 45 percent owned by Lockheed Martin Corp.

Intelsat had bought the satellite from Loral Space & Communications Corp. last March.

Zeus spokesman Todd Fogarty declined to comment.