Australian satellite operator NewSat said that it expects to secure the US$380m of export credit agency finance guarantees it needs to support the US$600m cost of its Jabiru-1 satellite project by the end of July.
The nascent satellite operator revealed…
Australian satellite operator NewSat said that it expects to secure the US$380m of export credit agency finance guarantees it needs to support the US$600m cost of its Jabiru-1 satellite project by the end of July.
The nascent satellite operator revealed that the board of the Export-Import Bank of the United States has approved the referral of NewSat’s application for a US$280m direct loan to the US Congress. Following a 35 day Congressional notification and comment period, the Ex-Im board will then make a final decision on providing the loan.
The loan is intended to support Lockheed Martin’s construction of the Jabiru-1 satellite and follows a six month period of due diligence by Ex-Im and its advisers into NewSat. Lockheed is also 6 months into the satellite build and has completed the preliminary design review.
In order to support the cost of the launch of the spacecraft by Arianespace in Q4 2014, NewSat has also applied for a US$95-100m debt facility guarantee from the French export credit agency Coface. The company said it expected approval for this guarantee in July.
Both the Coface and Ex-Im financings, which NewSat expects will have tenors of 8.5 years, are conditional upon NewSat raising approximately US$200m via an equity capital offering. The company intends to do so via the issue of new ordinary shares to institutional investors. The placement, which is not underwritten, is subject to NewSat shareholder approval.
The company is also looking to secure a revolving credit facility of up to US$25m, subject to the ECA and equity financings gaining necessary approvals.
Lazard is advising NewSat on the transaction, while Morgan Stanley will be the lead capital markets adviser.
Commenting on the progression of the Ex-Im loan, Adrian Ballintine, NewSat founder and CEO, said: “We are now in the final stages of financing the Jabiru-1 project. To date, the demand for satellite capacity has exceeded our expectations, with pre-launch customer contracts now at US$601m and a robust forward sales pipeline. This has given us the ability to build a bigger satellite with more capacity and greater coverage. The increased customer contracts signed and final satellite design are expected to result in an increase in the aggregate revenue stream from Jabiru-1 over 15 years from approximately US$2.5bn to approximately US$3bn (based on a 65-70% average utilisation rate).
“The Ex-Im Bank has a clear understanding and appreciation of the satellite industry. The vote and the availability of Ex-Im Bank Commercial Interest Reference Rate (CIRR) (currently 1.76%) funding for Jabiru-1 validates the project’s key strengths; recurring revenues and solid cash flow. NewSat is in a very exciting phase of growth and transformation, as we achieve yet another key milestone towards the launch of Jabiru-1.”
Beyond its debut bird, NewSat has ambitious plans for a further three satellites. Jabiru-2 is a Ku-band hosted payload aboard the Measat-3b satellite that is due to be launched in 2014. Co-located with Jabiru-1 at 91.5E, NewSat is predominantly targeting the Australian oil, gas and mining as well as government markets with the payload.
As for Jabiru-3 and -4, these Ka-band satellites are planned to be launched in 2016 and 2017 respectively with one located at 54E and the other at 89.5E. Both birds will target the military, government and carrier-grade telecoms markets.
