NewSat gets conditional waiver to continue Jabiru-1 satellite

Listed satellite communications company NewSat has reached an agreement with backers to waive alleged breaches of financial facilities that had halted funding of its Jabiru-1 satellite project.

In early August, NewSat informed the ASX the company was negotiating with US and French financiers of its Jabiru-1 satellite over a waiver for "alleged technical or documentary breaches of financial facilities" related to the drawdown of a loan from property developer Ching Chiat Kwong's Ever Tycoon.

Ching is also an non-executive director and investor in NewSat.

NewSat today said it had reached agreement with the financiers for a waiver, which comes with several conditions before funding of the Jabiru-1 satellite can continue.

One is a requirement to raise US$40 million (A$43 million) in new equity or as mezzanine funding over the next three months. The new capital equates to around 6 percent of the total project value, NewSat said.

The money is to be used to fund "certain Jabiru-1 satellite project accounts" as well as to create a reserve of working capital for the project's teleport business.

It will also be used to repay all outstanding debt to Ever Tycoon.

The financiers have also requested NewSat complete a review of its accounts, which will see the company implement new internal frameworks, processes and reporting.

As part of the new corporate structure, two new independent, non-executive directors - approved by the financiers - must be appointed to the NewSat board.

NewSat has appointed Linda Dillon, formerly of architect firm Woods Bagot, as its new chief financial officer, and Hong Kong based Roddy Sage as independent non-executive director, to satisfy the conditions of the waiver.

NewSat will continue to fund construction of the Jabiru-1 satellite out of its cash reserves set aside from the project. The financiers will only recommence their debt funding of the project once NewSat meets the terms of the waiver.

The company expects to Lockheed Martin to assemble Jabiru-1 late this year, and start spacecraft environmental testing next year.

Separately, NewSat advised the ASX that the launch of the MEASAT-3b satellite hosting its Jabiru-2 will occur on September 12 AEST this year.

The launch is scheduled to take place at the European Spaceport in French Guiana, on Arianespace flight VA218, NewSat said. 

The arrival of Jabiru-2 was delayed after Optus said it would need to reconfigure its Optus-10 satellite, which is to be carried on the same rocket.