Newsat Waiving Goodbye?

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Aspiring Asian Operator Newsat made an announcement this week titled “Waiver Conditions Satisfied”. The text reads differently. It actually suggests that a waiver agreement regarding a loan breach has been negotiated on the basis that Newsat needs to raise $50m to cure the breach and achieve the waiver.

In Project Finance Loans, during a breach period, the lender, in this case US EX-IM Bank, would not normally allow any more funds to be drawn down. So it may be that Lockheed Martin has paused or slow-balled construction. Newsat also announced completion of a “Preliminary Mission Analysis Review”. Contacts in the techie end of the space world tell us that this is a trivial milestone review that has no bearing on the progress of construction of the spacecraft and certainly does NOT indicate, as Newsat suggests, that it is within one year of completing the build of the spacecraft. Our guess is that it won’t be launched in 2015.

In fact, given the emergency funding required to avoid US EXIM from stepping in and taking over the company, some were speculating at the recent Satellite Finance Conference in Paris that Measat may become the owner of Newsat assets. Newsat does not own its own spectrum. It bought some filings that Greek filing shell Kyprosat had been hawking for years but these are all very low priority or timing out and are very unlikely to be capable of bringing in use. For this reason, EXIM would not fund a Newsat project without a spectrum deal. So Newsat paid Measat for Spectrum by giving Measat something like half of the Jabiru 1 satellite, costing therefore over $200 million just for the right to use Ka band spectrum in one slot for one satellite. Good deal for Measat. But it will get even better if Newsat is unable to meet its obligations to EXIM and other creditors with Measat being the only company able to use the satellite designed to operate at its orbital position, and therefore odds on likely to own the Newsat assets by mid 2015, some observers speculated.

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