SatelliteFinance understands that Iridium and Lockheed Martin have been actively lobbying Capital Hill over securing Export-Import Bank backing for the former’s US$2.7bn Iridium NEXT constellation.
One Washington-based source suggested that the two…
SatelliteFinance understands that Iridium and Lockheed Martin have been actively lobbying Capital Hill over securing Export-Import Bank backing for the former’s US$2.7bn Iridium NEXT constellation.
One Washington-based source suggested that the two companies have attended at least four separate authorising committees to argue the case for export credit backing.
The source added that a number of fiscal conservatives in the US capital have begun to question where the export potion of the deal would come from in a deal between two domestic companies.
However, Iridium’s corporate communications director Liz DeCastro told SatelliteFinance that contrary to the rumours, Iridium “did not have a big lobbying effort going on with Lockheed.”
She stated that ExIm Bank had informed Iridium that the financing for NEXT would qualify under its conditions and that the satellite company was very confident that if it chose Lockheed it would be able to secure ExIm backing.
As to where the export element would be derived, DeCastro said there were three factors to take into account. Firstly, Iridium has subsidiaries outside of the US, secondly the constellation and the products it sells are space based and thirdly that Iridium has a huge cache of partners outside of the US which use its services.
Iridium has made applications to both the French and US export credit agencies, Coface and the Export-Import Bank, to secure support for a ten-year debt facility of approximately US$1.5bn that would partially finance the construction of its second generation constellation.
The company has made no secret that the ability to secure export credit support is a key factor in determining whether Lockheed Martin or Thales Alenia Space will be selected for NEXT. Thales has already been selected as the prime vender for two Coface backed construction projects, the new constellations of Globalstar and O3b Networks. DeCastro emphasized that process remains an even competition.
Meanwhile, Iridium reported a substantial rise in EBITDA in its full year 2009 results. While total revenue decreased 0.6% year-on-year to US$318.9m, operational EBITDA was up 20.5% to US$133.9m. This was also above the previous guidance of US$126-130m.
The company also saw subscriber numbers increase over the year by 15.3% to approximately 369,000.
The key driver to this growth was the Iridium’s high margin commercial service voice and M2M data revenue which grew by 20.5% to US$159.6m. Subscriber equipment revenue continued to be the business unit most challenged by the downturn, with 2009 revenues falling by 30.4% to US$83.5m.
