Australian satellite operator NewSat has finally executed the US$611m financing it secured for the Jabiru-1 Ka-band satellite project.
The company announced on 5 July that it signed all the documents in relation to the financing and is now completing…
Australian satellite operator NewSat has finally executed the US$611m financing it secured for the Jabiru-1 Ka-band satellite project.
The company announced on 5 July that it signed all the documents in relation to the financing and is now completing the compliance program with respect to the transaction. The documentation includes the Common Terms Agreement, Export-Import Bank Facility Agreement, COFACE Facility Agreement, Reserve Facility Agreement, Inter-creditor Deed and Security Trust Deed.
Following the signing of these documents, NewSat made a further progress payment of US$45m to Lockheed Martin for the construction of the US$436m Jabiru-1 satellite. NewSat has now made US$72m of progress payments to the manufacturer.
The bulk of the Jabiur-1 financing takes the form of US$399m of export credit agency backed funding. US Export Import Bank is providing a direct term loan of close to US$290m to support Lockheed’s construction of the spacecraft. While the French ECA Coface is guaranteeing a loan of around US$110m, provided by Standard Chartered, Credit Suisse and Societe Generale, which will help fund Jabiru-1’s launch by Arianespace in 2015.
Both these loans were conditioned upon NewSat securing additional equity and mezzanine funding.
To that end, the satellite operator raised A$105m (US$108m) in a share placement in February 2013. The offering saw NewSat issue 262.5 million shares at A$0.40 per share to international (80%) and local (20%) institutional investors. Credit Suisse and Baillieu Holst co-managed the issuance.
In parallel, NewSat raised US$30m in subordinated convertible PIK debt from Ching
Chiat Kwong, the CEO founder of SGX-listed property development company Oxley Holding Limited. Ching also participated in the share placement and has been appointed as a non-executive director of NewSat.
Finally, Standard Chartered also agreed to provide a US$25m debt service reserve facility.
Lazard is NewSat’s financial adviser on the financing while ArgoSat Advisers has been hired for advice on the Jabiru-1 project. Daun Consulting provided advice on the Singapore investor.
Commenting on the completion of the documents, Adrian Ballintine, NewSat founder and CEO, said: “Executing the financing documents is a major achievement for NewSat, as the company expands from a reseller of satellite capacity to an owner of satellites.
“I look forward to updating you further on NewSat’s progress, as we secure new customers and reach more milestones as we approach the launch of Jabiru-1.”
NewSat states that so far Jaibru-1 has secured US$618m of pre-launch customer contracts, most sold at a 30% discount to market rates, and a US$454m forward sales pipeline.
Ballintine previously told SatelliteFinance that the company estimates that over its 15-year life the satellite will generate about US$3.5bn of revenue at an 80% margin, roughly US$170m EBITDA per year.
With the construction of the satellite on target for the 2015 launch, NewSat is currently in the process of completing the ground segment requirements.
The company closed the purchase of land adjacent to its existing Adelaide teleport facility in May 2013 and the development application for the site is currently being finalised and will be lodged with the local government authorities in the coming weeks.
NewSat then plans to construct the Jabiru satellite control facility and Jabiru customer support centre.
Finally, with the company having selected the vendor for the satellite control system, it is now seeking proposals for ground antennas and related infrastructure required to communicate with the Jabiru-1 satellite.
