Israel's Space Communications said it could seek US$50 million (A$66 million) or a free flight from Elon Musk's SpaceX after a Spacecom communications satellite was destroyed last week by an explosion at SpaceX's Florida launch site.
Officials of the Israeli company said Spacecom also could collect US$205 million from Israel Aerospace Industries, which built the AMOS-6 satellite.
SpaceX said it does not disclose contract or insurance terms. The company is not public, and it has not said what insurance it had for the rocket or to cover launch pad damages beyond what was required by the Federal Aviation Administration, which oversees commercial US launches, for liability and damage to government property.
SpaceX has more than 70 missions on its manifest, worth more than US$10 billion, for commercial and government customers.
Spacecom has been hit hard in the aftermath of last week's explosion that destroyed the SpaceX Falcon 9 rocket and its payload. The Israeli company said the loss of the satellite would have a significant impact, with its equity expected to decline by US$30 million to US$123 million.
Spacecom shares dropped 9 percent on the day of the explosion, which occured late in the last trading day of the week. Trading in the shares was suspended on Sunday morning, and the stock plummeted another 34 percent when trading resumed.
The company's general counsel Gil Lotan said it was too early to say if the company’s planned merger with Beijing Xinwei Technology Group would proceed.
Xinwei last month agreed to buy Spacecom for US$285 million, saying the deal was contingent on the successful launch and operation of Spacecom's AMOS-6 satellite.
"We hope to continue fruitful communications with the prospective buyer," Lotan said.
AMOS-6 was to be used by a number of key clients, including Facebook and Eutelsat Communications, which leased the satellite’s broadband services to expand internet access in Africa. Both firms are now pursuing other options.
The cause of the accident is under investigation. Neither SpaceX, nor the FAA which is overseeing the investigation, have said how much damage the explosion caused at SpaceX's primary launch site at Cape Canaveral Air Force Station in Florida.
SpaceX said it would shift flights to a second launch site in Florida, which is nearing completion and which was last used to launch NASA's space shuttles.
Last week's accident, which occurred as the company was fueling its rocket as part of a routine prelaunch test firing, was the second failed mission for Musk's space company in 14 months. In June 2015, a Falcon 9 rocket exploded about two minutes after liftoff from Florida, destroying a load of cargo headed to the International Space Station.
SpaceX returned to flight in December and since then has flown nine times, all successfully. It was scheduled to fly for the 29th time on Saturday. SpaceX declined to comment about what impact the latest accident would have on its schedule.