The US Bankruptcy Court in Delaware has approved Sea Launch’s plan of reorganisation enabling the launch provider to emerge from Chapter 11 bankruptcy protection after thirteen months, under a new owner, the Russian manufacturer RSC Energia. Kjell…
The US Bankruptcy Court in Delaware has approved Sea Launch’s plan of reorganisation enabling the launch provider to emerge from Chapter 11 bankruptcy protection after thirteen months, under a new owner, the Russian manufacturer RSC Energia.
Kjell Karlsen, president and general manager of Sea Launch, told SatelliteFinance that at the hearing there had been one final objection to the plan from the US IRS and that this was discussed in court but the judge decided to rule in Sea Launch’s favour.
Under the terms of the plan, Energia will own 95% of Sea Launch with the remaining 5% held in a trust for previous owners Boeing (just over 3%) and the Norwegian engineering company Aker (almost 2%). Energia is also investing US$155m into Sea Launch, US$140m of which will be a direct investment into the company to help bring it back to operational readiness and US$15m to satisfy creditor requirements.
Following the court confirmation, Karlsen said the next step is for the deal to get regulatory approval. Sea Launch has already been working on this for the past couple of months and on June 21 the company filed an application with CFIUS (Committee on Foreign Investment in the United States). Karlsen said that there is a thirty day approval process for the first gatekeeper after which the filing is either approved or goes to Congress, which would then take another 45 days or so. Karlsen expected the Sea Launch – Energia transaction to be passed onto Congress.
During this period and afterwards, the company also needs to transfer a number licences from Boeing to the new owners. Karlsen said that the process continues to go smoothly and should be completed in the third quarter 2010. Once this is achieved, the company hopes to announce a number of new launch contracts. Karlsen said that the company was also targeting 2013 for new launch opportunities.
Karlsen added that the new owner will make a US$200m working capital facility available to its hardware purchasing subsidiary to enable it to acquire the necessary parts even if payments from its customer contracts have not been processed. He added that once Sea Launch emerges from Chapter 11, the company plans to operate on a debt free basis and will not look to generate capital through any asset backed financing.
Sea Launch will continue to operate from its Long Beach, California base although the company’s headquarters are planned to be moved to Switzerland.
Jefferies continues to advise Sea Launch, as do Alston & Bird LLP and Chris Picone of Buccino & Associates. Energia Overseas Limited is being advised by Salans LLP and the UK aerospace consultant Avicon.
Nets multi-launch EchoStar contract
Sea Launch also announced that it has signed an agreement with EchoStar Satellite Services giving the latter the ability to launch up to three satellites.
Sea Launch previously launched the EchoStar IX satellite in 2003, EchoStar X in 2006, and EchoStar XI in 2008.
“EchoStar is pleased to have completed successful launches with Sea Launch in the past, which give us confidence in Sea Launch’s ability to execute on future launches,” said Dean Olmstead, president of EchoStar Satellite Services. “The Sea Launch Zenit-3SL vehicle has been a reliable, flight-proven launch system and we look forward to continued success.”