NEWSAT Secures COFACE Approval for US$102.74m
NewSat Limited is pleased to announce that the Jabiru-1 satellite project has secured further export credit funding. COFACE, the export credit agency acting on behalf of the French government, has given a promesse de garantie of US$102.74 million. The promesse de garantie will be used to back loans to NewSat in order to finance the building of the rocket by Arianespace. The terms of the promesse de garantie are confidential and cannot be released at this stage.
As previously announced, a key condition to financial close of the Ex-Im Bank and COFACE debt facilities is further funding in the amount of approximately US$200 million. At the General Meeting of Shareholders to be held next Monday 23 July 2012, the Company will seek approval to raise that amount of ordinary equity.
NewSat's intention now is to split this funding between equity and mezzanine debt to minimise dilution to existing shareholders as much as possible. The Company is in ongoing discussions with several interested parties in relation to this funding. It is likely that approximately half of the US$200 million will be subordinated mezzanine debt and the other half equity.
COFACE funding
The issue of the promesse de garantie by COFACE follows over six months of due diligence by COFACE and its advisors. It also follows Ex-Im Bank¡¦s recent approval to refer NewSat's application, for a ~US$280 million direct loan, to Congress. The COFACE guarantee would support a syndicated debt facility to be provided principally by Standard Chartered Bank.
The COFACE-backed debt facility will support the construction and launch of the Arianespace rocket, Ariane 5, which will place the Jabiru-1 satellite in geostationary orbit.
Steps to launch of Jabiru-1 satellite
The Jabiru-1 satellite project has entered its final stages, with key milestones to date as follows:
1. Acquired eight orbital slots
2. Secured US$601 million in binding pre-launch customer contracts
3. Executed satellite manufacturer contract with Lockheed Martin
4. Lockheed Martin is six months into satellite build and has completed Preliminary Design Review
5. Executed launch vehicle contract with Arianespace for launch in 2014
6. Ex-Im Bank Board approved the referral to Congress for a ~US$280 million direct loan for notification and comment
7. Secured COFACE promesse de garantie for US$102.74 million
The final stages on the path to launch include:
8. Raising of approximately US$200 million by way of a mix of equity and subordinated mezzanine debt
9. Satellite deployment into geostationary orbit
In commenting on the COFACE support and funding opportunities, Adrian Ballintine, NewSat Founder and CEO said: "It gives me great pleasure to announce that the Jabiru-1 satellite project has received the support and backing of COFACE. With Ex-Im Bank, NewSat now has over US$380 million of export funding."
"For several months we have been working with some of the world¡¦s major financial institutions regarding the securing of up to US$200 million to complement the export funding. It is not practical for the entire amount to be equity, and as it currently stands I anticipate approximately half will be in the form of mezzanine debt."
"The COFACE and Ex-Im Bank deals are significant milestones towards the launch of Jabiru-1. Demand for Jabiru-1 satellite capacity continues to surpass expectations, with binding pre-launch customer contracts now over US$600 million and a future sales pipeline of over US$500 million across the Jabiru fleet."
"The Jabiru-1 satellite at 70% utilisation is expected to generate more than US$3 billion revenue over the 15 year life of the satellite. Considering satellites in the geography of Jabiru-1 are mostly in excess of 90% utilisation, NewSat’s projections are realistic and achievable.”
