NewSat administrator
negotiates new deal with
Arianespace
The Australian
administrators of NewSat
have negotiated an
agreement with launch
services provider
Arianespace that has
given shareholders a
faint hope the company
might still emerge from
bankruptcy proceedings
intact.
The deal, which was
ratified in a US
bankruptcy court,
stipulates that
Arianespace will not
terminate the launch
services agreement it
has in place with NewSat
before July 15, 2015.
Arianespace was
contracted to launch
NewSat's Jabiru-1
satellite in December
2011; however, when the
company went into
administration in April
NewSat had US$42.4
million in outstanding
invoices owing to
Arianespace.
Key Australian
shareholders told
CommsDay they believed
the “standstill
agreement” with
Arianespace would give
the administrators
crucial time to
negotiate a financial
outcome that would allow
the company to
recommence business and
complete the Jabiri-1
satellite project.
PPB Advisory practice
leader Marcus Ayres, one
of two NewSat
administrators, has
previously told
creditors that retaining
existing contracts was
key to negotiating a
“capital solution” that
would allow the company
to emerge from
bankruptcy. He said the
alternative – a sell-off
of the company's assets
– was not in the best
interests of creditors
or shareholders.
However, the crucial
contract between NewSat
and satellite builder
Lockheed Martin has
already been cancelled
by the court. The
decision to cancel the
satellite construction
contract followed an
emergency meeting by
teleconference between
the court, the
administrators and
Lockheed Martin
representatives. The
court heard that the
administrators were not
in a position to assume
the construction
contract because they
did not have “absolute
certainty” regarding the
close of a transaction
that would refinance
NewSat.
The court has also
granted Lockheed Martin
an administrative
priority claim for all
of the satellite
construction work done
since the earlier
temporary orders that
prevented its
cancellation. NewSat's
legal representative in
the US bankruptcy court,
Ken Coleman, has said
that Lockheed Martin has
indicated it would be
willing to discuss new
terms for the completion
of the Jabiru-1.
As previously
reported by CommsDay,
the administrators of
NewSat are in talks with
a number of parties
looking to either
refinance the project or
purchase key assets.
Malaysian satellite
operator Measat has
already made an official
offer to buy all or some
of the NewSat assets.
Measat already has
significant ties to
NewSat's Jabiru
satellite programme: the
Jabiru-1 satellite,
which was due to launch
next year, was being
built to carry a Measat
payload of 18 Ku-band
transponders that would
provide back-up services
and support its core
direct-to-home markets
in Malaysia and India.
As part of the original
US$197 million
transaction, NewSat
agreed to locate the
satellite in an orbital
slot held by Measat at
91.5°E.
Measat is one of a
number of companies that
have been provided with
detailed information on
NewSat's finances and
assets. Others include a
number of global
satellite operators as
well as potential
financiers.
Singaporean
shareholders of NewSat
are also talking with
the administrators about
a possible rescue
package. Ching Chiat
Kwong, one of
Singapore's richest men,
is the majority
shareholder of NewSat
while countryman and
financier Bryan Yap also
has a significant stake.
Geoff Long, Commsday
