Hong Kong-based satcoms firm SpeedCast (ASE:SDA) has bought teleport and services assets from failed Australian satellite operator NewSat (ASE:NWT) for A$12m (US$9m).
The deal leaves NewSat as a shell company on Australia’s stock exchange, with an…
Hong Kong-based satcoms firm SpeedCast (ASE:SDA) has bought teleport and services assets from failed Australian satellite operator NewSat (ASE:NWT) for A$12m (US$9m).
The deal leaves NewSat as a shell company on Australia’s stock exchange, with an Arianespace launch slot for a partly built satellite that its manufacturer Lockheed Martin retained title of in May.
It does continue to own residual assets relating to the Jabiru-1 satellite, such as licences and certain customer contracts, but does not hold any interest in the spacecraft or its construction contract.
Administrators had previously tried to sell the entire company to Malaysia’s Measat, which owns Ka-band rights for where Jabiru-1 was to be placed at 91.5E, and also hosts NewSat’s Jabiru-2 payload on the Measat-3b satellite it launched late last year.
However, that deal fell apart in May, putting at risk the hundreds of millions of dollars that its shareholders and ECA backers have put into the project. The US Ex-Im Bank, which has stopped taking orders since losing its mandate last week, was providing a direct term loan of close to US$290m, while France’s Coface had been guaranteeing a loan of about US$110m, provided by Standard Chartered, Credit Suisse and Societe Generale.
NewSat hired PPB Advisory as administrator in April after attempts to resume Jabiru-1’s funding broke down. Its issues stem from the alleged breach of the debt’s terms last year when it borrowed a US$10m unsecured short term loan from shareholder Ever Tycoon.
SpeedCast said its deal includes land and buildings at NewSat’s teleport facilities in Adelaide and Perth, the associated plant and equipment, and “most of the customer and supplier contracts”. It is also taking on 20 employees from across the group’s operations, engineering and sales departments.
It is the eight satcoms-related acquisition that SpeedCast has made since being bought by private equity firm TA Associates in late 2012.
SpeedCast CEO Pierre-Jean Beylier said: “We continue to execute on our strategy of growing the business through strong organic growth in the end markets we operate in, and through acquiring value enhancing assets in key locations and/or industries where we see long-term sustainable growth.
“Our well established Australian network, augmented by NewSat’s infrastructure assets and customer base, will enable us to expand our presence in the market, in particular with government and Perth-based customers to which we can sell additional services globally, as well as enhance the level of local support previously available to our customers.
“NewSat’s state-of-the-art teleport infrastructure and highly experienced operations and engineering team also enhances our ability to serve our customers in Asia-Pacific, thus strengthening our leadership position in the region, while giving us new capabilities to provide services into Middle East and Africa; it represents an attractive platform for future growth.”
Beylier hinted at an Asia Pacific deal in an interview with SatelliteFinance last month, as he set out its strategy for buying growing companies that filled a vertical or geographic gap, and added industry expertise.
SpeedCast expects the NewSat assets to post A$22m (US$16.5m) in revenues and A$3.8m (US$2.8m) in EBITDA for 2015, generating A$0.2m-A$0.3m (US$150k-225k) in cost synergies this year.
It is funding the transaction from available cash and existing debt facilities.
The group provides managed network services in more than 60 countries across the world, including in Africa and the Middle East.
