The US and French export credit agencies, Ex-Im Bank and Coface, have agreed to amend the equity requirements connected to their respective US$280m direct loan and US$108.4 loan guarantee to Australian satellite operator NewSat.
The amendment enables…
The US and French export credit agencies, Ex-Im Bank and Coface, have agreed to amend the equity requirements connected to their respective US$280m direct loan and US$108.4 loan guarantee to Australian satellite operator NewSat.
The amendment enables NewSat to reduce the amount of equity needed to be raised by the company and instead increase the mezzanine debt component of the financing package that will be used to fund its Jabiru-1 satellite.
Of the total US$583m funding for the Ka-band satellite, US$200m is due to come from a mix of new shares and mezzanine debt. Initially this was meant to be split equally but will now rely on a larger mezzanine component.
To that end, NewSat stated that it is in advanced stages of negotiation with a sophisticated investor over a US$30m convertible note facility that would form part of the mezzanine funding. This investor would also participate in the share placement.
As to the senior debt component, Ex-Im Bank is set to provide a US$280m term loan to support the construction of the spacecraft by US-based Lockheed Martin Commercial Space Systems, while Coface has agreed to guarantee a US$108.4m loan, principally provided by Standard Chartered, which will help fund Jabiru-1’s launch by Arianespace in Q4 2014.
Commenting on the ongoing negotiations, NewSat said in a stock exchange filing on 4 February: “Negotiations with potential mezzanine debt and equity investors are continuing. It is anticipated that the recent approval from the Ex-Im Bank and Coface will give further impetus to these negotiations. In this respect, the company remains confident of finalising these negotiations and achieving financial close shortly.
“Nevertheless, a number of interdependent matters still need to be negotiated, agreed and finalised and there is no certainty that financial close will be achieved within a short period albeit the company is working toward achieving this as soon as practicable in February.”
On 10 December 2012, NewSat voluntarily suspended its shares on the Australian Stock Exchange due to the ongoing financing negotiations. The company argued that due to the uncertainty caused by these discussions, it did not want its shares to trade on an uninformed basis.
The company reiterated this point in its latest annoucement and stated that the voluntary suspension would remain in place until at least 1 February 2013.
Lazard is NewSat’s financial adviser on the financing while ArgoSat Advisers has been hired for advice on the Jabiru-1 project.
