NewSat has suspended trading of its shares on the Australian Securities Exchange as it reaches a critical point in its negotiations with the lenders of its Jabiru-1 project financing.
The company requested a voluntary suspension from trading on 26 March…
NewSat has suspended trading of its shares on the Australian Securities Exchange as it reaches a critical point in its negotiations with the lenders of its Jabiru-1 project financing.
The company requested a voluntary suspension from trading on 26 March so that it could conclude the ongoing negotiations.
NewSat needs to secure a waiver from its lenders so that it can restart funding under its export credit agency backed financing. Since the suspension of the debt last year, both Jabiru-1’s manufacturer Lockheed Martin and launch provider Arianespace have issued notices of termination to NewSat for non-payment.
In a statement to the ASX, NewSat CFO Linda Dillon said: “NewSat continues to negotiate and work with its lenders to find an appropriate solution to allow the lenders to recommence funding for the Jabiru-1 project financing.
“The solution is likely to require an additional capital raising and NewSat is considering, and pursuing, various alternatives in that regard.
“NewSat anticipates an announcement will be made after Easter.”
NewSat’s ECA financing was suspended due to alleged breaches it made to the terms of the facility after it secured a A$10m short term loan from shareholder Ever Tycoon Limited in mid-2014.
The satellite operator has been in discussions with its lenders since August to agree a waiver to these breaches and has implemented a number of actions to reassure them. These have so far mainly been to improve NewSat’s corporate governance, introducing new internal frameworks and reporting as well as appointing a new CFO and two new independent directors.
However, the main requirement for the waiver is for NewSat to raise around US$38m in equity or mezzanine financing.
While it has always been confident of achieving this, it has yet to undertake the fund raising and it is running out of time to do so.
