NewSat enters administration

McGrath Nicol will assess the company’s financial position

NewSat (ASX: NWT) and its subsidiaries have entered administration pending an assessment of its financial position.

The subsidiaries include NSN Holdings, NewSat Services, Jabiru Satellite Holdings, NewSat Space Resources, NewSat Networks and Jabiru Satellite.

Jason Preston of McGrathNicol said the receivers priority is to take control of the assets of NewSat and progress the capital raising activities recently commenced by the company.

“In the interim, the operations of NewSat will continue on a business as usual basis,” he said in a statement to the ASX.

An emergency motion for a temporary restraining order and an injunction have been granted under Chapter 15 of the Bankruptcy Code in the United States on a temporary basis.

NewSat entered an ASX trading halt on 26 March 2015. This was so it could work with its lenders in the US to find a way to recommence funding for the Jabiru-1 satellite project financing.

“The solution is likely to require an additional capital raising and NewSat is considering various alternatives in that regard,” said the company at the time.

Because of the suspension of funding, NewSat was unable to make payments to Arianespace, the company which will launch Jabiru-1. Arianespace issued a termination notice and suspended activities under its launch service agreement in April.

On 8 April, NewSat revealed it had been in discussions with Jabiru-1 construction firm Lockheed Martin about delayed payments.

“Not withstanding the suspension of debt funding, construction progress of the Jabiru-1 satellite remains on track with the revised contract schedule,” the company said in a statement to the ASX.

In January 2014, NewSat signed a 15-year contract with a telecommunications company in South West Asia for capacity on the Jabiru-1 satellite. The contract was worth US$160 million.

Follow Hamish Barwick on Twitter: @HamishBarwick

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