NewSat enters administration over troubled satellite

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NewSat enters administration over troubled satellite

Receivers look to save Jabiru-1.

Australian satellite company NewSat has been placed into court-appointed administration in a bid to save its $600 million flailing Jabiru-1 satellite project. 

NewSat's secured creditors today appointed PPB Advisory as administrators and McGrathNicol as receivers.

Both have been tasked with taking control of NewSat's assets, urgently assessing its financial position and progressing recently commenced capital raising activities as an immediate priority.

NewSat has also been granted an emergency, temporary order in the US to keep construction contracts with the likes of Lockheed Martin and Arianespace going while it works through its financial troubles in Australia.

Lockheed and Arianespace both earlier this year issued default notices over NewSat's failure to make payments.

NewSat's Jabiru-1 problems stem from an "alleged technical or documentary breaches of financial facilities" last year related to the drawdown of its loan from financier Ever Tycoon, which put financing on hold.

Debt funding from its US and French financiers was set to recommence after NewSat met a number of conditions for a waiver of the breaches, but NewSat last month entered a trading halt over ongoing issues with the resolution of its funding issues.

One of its lenders, COFACE, had decided not to support the waiver and pulled its remaining funding from the project, representing US$160 million (A$209 million) lost.

The financial troubles meant NewSat was unable to make its payments to both Lockheed Martin, the company building the satellite, to the tune of US$21 million (A$26.5 million), nor to satellite launch provider Arianespace.

NewSat at the time said it would need as much as US$70 million in extra funding during the third quarter of this year to keep the project running, admitting the funding issues could have disastrous effects on the Jabiru-1 project.

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