NewSat looks to export credit for Jabiru

The Australian services provider NewSat has stated it is close to a formal announcement of its own long-awaited satellite project.
Surprisingly, a progress report released by the company indicated that the satellite, codenamed Jabiru, will not be…

The Australian services provider NewSat has stated it is close to a formal announcement of its own long-awaited satellite project.

Surprisingly, a progress report released by the company indicated that the satellite, codenamed Jabiru, will not be developed or financed as part of the Australian government’s National Broadband Network (NBN) program.

NewSat has apparently abandoned its previous attempts to gain government funding and now believes that it is feasible that the company will own 100% of the new satellite’s capacity.

It will do this partly through leveraging its existing teleport assets, but mainly through the use of export credit financing. The report said: “NewSat will take advantage of the current state of the capital markets and specifically inexpensive bank debt made available by governments whose objective is to support local suppliers via export credit.”

NewSat believes that it can finalise financing and all relevant production contracts to ensure that the satellite will be launched during 2012.

The company is receiving strategic advice from ArgoSat and financial advice from Lazard.

It predicts that the satellite will generate more than US$1bn in revenue over its lifespan and more than US$500m in profits.

The business model will be oriented towards supplying large amounts of enterprise-level capacity to a small number of high-value customers, along the lines of the oil and mining companies NewSat currently serves. The capacity will be used primarily for broadband and telecommunications.

NewSat anticipates that it will have contracts in place to fill at least half the satellite’s capacity prior to the signing of any construction agreement.

Speaking at the Australasia Satellite Forum in Sydney, NewSat CEO Adrian Ballintine said: “In the predominantly Fortune 500 or ASX 100 that we sell into we have found a very rich and robust business in being able to deliver sophisticated applications to sophisticated companies via sophisticated means in terms of satellite technology.

“Woolworths was a good example, we’ve been able to get more and more applications into those stores. Oil companies from all over the world are another major customer, on and off-shore. We continue to grow our business in delivering robust applications and in delivering services they think are better than cable. We don’t play in the low end or consumer end, but in the business and arena we play in we think it’s a very viable option.”