Australian satellite operator NewSat has signed a capacity lease agreement with its Russian counterpart RSCC.
The three-year deal sees NewSat lease the steerable beam on RSCC’s Express-AM3 satellite. The spacecraft is currently located at 103E, having…
Australian satellite operator NewSat has signed a capacity lease agreement with its Russian counterpart RSCC.
The three-year deal sees NewSat lease the steerable beam on RSCC’s Express-AM3 satellite. The spacecraft is currently located at 103E, having been moved from its previous 140E slot earlier this month.
The capacity will be used by NewSat as part of its US$13.6m three-year teleport contract with an unnamed Asian telecommunications company that commences August 2014. NewSat said the customer will use the beam to provide cellular and Wi-Fi backhaul services across parts of Asia.
Commenting on the contract, Adrian Ballintine, founder and CEO of NewSat, said: “During a year where our teleport business faced some challenging market conditions, this significant contract has enabled us to finish the financial year on a positive note. Albeit slower than expected, it is pleasing to see our diversification strategy into new markets is starting to yield results and positions NewSat for a stronger FY2015.”
For its part, RSCC said the deal is part of its strategy to enter new markets in the East. Yuri Prokhorov, RSCC’s general director, said: “The agreement between RSCC and NewSat is an important milestone in the expansion of the Russian company’s customer base in the Asia-Pacific.
“We are glad to deliver NewSat a unique satellite platform capable of providing a wide range of services and applications for the end users in the region.
“We also hope to continue our further cooperation with NewSat and combine our joint efforts in offering communications and broadcasting services mostly required by the satcom market using RSCC’s satellites in the future.”
NewSat nets new loan from Ching Chiat Kwong
Earlier this month, NewSat announced in a stock exchange filing that it has entered into a binding arrangement for a US$10m unsecured short term loan facility.
The debt is being provided by Ever Tycoon Limited (Ever Tycoon), a related party of NewSat director and shareholder Ching Chiat Kwong.
Under the terms of the facility, Ever Tycoon will provide an initial loan of US$6m with a right to drawdown a further US$4m.
The loan pays an interest of 11% per annum and matures on 16 December 2014. There is an option to extend it by a further period of six months and during this time NewSat may convert any outstanding amount into shares, subject to shareholder approval.
The financing is also conditional on NewSat receiving written consent from the lenders of its US$399m export credit agency-backed funding.
Proceeds from the loan will be used for the teleport business and to cover the costs associated with NewSat’s ongoing restructuring strategy.
As part of the arrangement, the two parties have also agreed to amend the US$30m subordinated convertible PIK note that Ching Chiat Kwong, through Ever Tycoon, provided as part of the equity and mezzanine funding that NewSat needed to raise for its wider ECA-backed facility.
Under the agreement, NewSat will amend the conversion price of the note to A$0.34 per share; pay a coupon of 20% per annum on the note accruing from 28 February 2014 until conversion; and pay US$4m in consideration of the cancellation of approximately 69.7 million unvested warrants held by Ever Tycoon. These will be paid in shares at a price of A$0.34 per share.
Last July, NewSat announced that it had finally executed the US$611m financing it secured for the Jabiru-1 Ka-band satellite project.
Alongside the two ECA-backed facilities, a US$290m direct term loan from the US Ex-Im Bank and a US$110m guaranteed loan from Coface of France, NewSat raised US$108m through a share placement, US$40m through the convertible note and US$25m through a debt reserve facility from Standard Chartered.
