21 Aug 20. British Startup Drone Defence Raises €550k. Drone Defence has secured around €550k in seed funding from US based corporate investor to develop proprietary drone detection technology, which combats the emerging drone threat.
Founded in 2017, by a former British Army Officer, Richard Gill, Drone Defence addresses security concerns over the illegal use of drone technology. They’re aiming to be one step ahead, as drones change the way mankind views, interacts with, and will eventually move around our planet.
From invading our privacy, to spying on companies and delivering drugs into prisons, drones can be deployed for any number of illegal activities, including getting into the hands of terrorist or activist organisations.
The team knows that for drones to unlock their full capabilities, solutions need to be found to safely integrate autonomous drones into the sky in a future in which they will regularly share airspace with manned aircraft. The ability to track any kind of aircraft and interpret that data quickly and effectively is the key to unlocking the future of drone technology.
The startup has already made deployments internationally, including their SkyFence drone blocking product in Guernsey prison.
This investment will allow Drone Defence to make advances in this field, and to develop their existing products further. They are currently also recruiting as the business expands – particularly welcome news during challenging times for many businesses in the wake of the COVID-19 pandemic.
Richard Gill, founder and CEO of Drone Defence said:
“This investment is going to drive our business forward and enable us to achieve our ambition of safely integrating small autonomous vehicles into general airspace. It will allow us to hire the experts needed to develop our prior proprietary technology and integrate it with our existing market leading mitigation technology.”
“Not only that the investment has also given us the springboard to launch into the America’s markets and with early interest from significant customers it is clear that the drone security market is only set to grow.”
(Source: UAS VISION/EU Start-Ups)
18 Aug 20. Elon Musk’s SpaceX raises $1.9bn in funding. Billionaire Elon Musk’s SpaceX has raised $1.9bn in new funding, according to a regulatory filing bit.ly/3178nk3 on Tuesday.
This would be the largest single fundraising round to date by SpaceX, according to PitchBook data.
Bloomberg, which reported about the funding round last week, said the private rocket company will have an equity value of $46bn after the transaction, citing people familiar with the matter.
The funding comes as SpaceX races to build out its Starlink satellite constellation to offer broadband internet commercially by the end of 2020. The company launched its eleventh batch of satellites on Tuesday, and operates over 600 satellites in low-Earth orbit.
SpaceX’s Crew Dragon capsule completed its first two-month mission carrying astronauts for NASA in early August, with plans to start routine crewed missions to the International Space Station in late October. (Source: Reuters)
19 Aug 20. KBR to Acquire Centauri, Significantly Expanding its Military Space, Defense Modernization and Cyber Solutions Portfolio.
– Creates an upmarket leader in Civil, Military, Intelligence and Commercial Space Solutions
– Strengthens KBR’s Military Space and Intel Space Businesses with Best-in-Class Portfolio Focused on high-priority Defense Modernization, MilSpace and Intelligence Budgets
– Further Expands and Differentiates KBR’s Capabilities in High-End Engineering, Technology Development and Mission Support Services for Defense and Intelligence Customers
– Advances KBR’s Strategic Transformation and Attractively Accretive
HOUSTON, Aug. 19, 2020 /PRNewswire/ — KBR, Inc. (NYSE: KBR) (“KBR” or the “Company”) today announced it has entered into a definitive agreement with Arlington Capital Partners (“Arlington Capital”), a Washington, DC-based private equity firm, under which KBR will acquire Centauri, LLC (“Centauri”), a leading independent provider of high-end space, directed energy and other advanced technology solutions, for approximately $800m (net of tax benefits) in cash.
Centauri is a technology-driven company that provides high-end engineering and development solutions for critical, well-funded, national security missions associated with space, intelligence, cyber and emerging technologies, such as directed energy and missile defense. Centauri has achieved significant growth over the last four years, becoming a leading pure-play space and intelligence solutions provider and benefitting from its highly cleared and technical workforce, space domain awareness and a customer-focused footprint of classified operations. Centauri also has a substantial and growing pipeline of opportunities in Department of Defense (DoD) and intelligence community programs that benefit from bipartisan support. Headquartered in Chantilly, Virginia with 22 offices across the United States, Centauri has more than 1,750 employees, a majority of which have special access clearances and half of whom have advanced degrees.
The Centauri acquisition will be transformative for KBR. With Centauri, KBR significantly expands its military space and intelligence businesses and builds on its already strong cybersecurity and missile defense solutions. The companies possess complementary and established customer relationships supported by recurring contracts serving some of the U.S. government’s most important, challenging and complex missions. KBR expects to benefit from a more balanced and more differentiated portfolio that is resilient across business cycles; poised for continued growth in attractive, high-priority domains. The transaction builds on KBR’s previous strategic acquisitions and successful integrations of Wyle, Honeywell Technology Solutions and Stinger Ghaffarian Technologies, and creates a combined platform with extensive expertise in civil, military, intelligence and commercial space solutions.
“KBR has undergone a deliberate, strategic transformation to be a provider of innovative, higher-end, digitally-enabled solutions and technologies in attractive, stable domains,” said Stuart Bradie, KBR President and Chief Executive Officer. “The acquisition of Centauri firmly aligns with our strategy of increasing KBR’s highly technical, mission-focused, synergistic capabilities and enduring customer relationships. We are excited to welcome and work closely with the Centauri team as we continually drive growth and value-creation for our shareholders and other stakeholders.”
David Wodlinger, a Partner at Arlington Capital, said, “Centauri was purpose-built to solve the most complicated space and directed energy challenges faced by our country, a strategy that will only be enhanced by KBR’s scale, strong management team and shared focus on quality and culture.”
“By combining with KBR, Centauri will have greater opportunities to grow as part of a larger and more diversified company,” said Dave Dzaran, Chief Executive Officer of Centauri. “Centauri and KBR share strong employee-focused, mission-first cultures and complementary platforms, making this an ideal combination. As part of KBR, our innovation and initiative will enhance our combined company’s ability to develop systems and provide solutions in space, intelligence and cyber. KBR’s global foundation of safety and sustainability will help us drive continuous growth and keep our nation safe.”
Strategic and Financial Benefits of the Acquisition
- Creates a Leader in Civil, Military, Intelligence and Commercial Space Solutions: Centauri is at the forefront of military and intelligence space systems engineering and development, bringing increased scale and complementary expertise to KBR’s existing capabilities in space system design, development, test, launch and operations, and creating a leader in end-to-end space solutions. This is entirely consistent with the United States Space Force strategy to converge capabilities across the military, civil, and commercial domains to achieve space superiority goals consistent with the U.S. National Security Strategy
- Establishes a Highly Complementary Technology-Focused Platform with Resilient Cash Generation: With a 2021 revenue outlook of $700+m, EBITDA margins of approximately 10%, more than $1bn in contract backlog and options, and strong cash flow generation, Centauri’s high-growth and low-capital intensity platform aligns well with KBR’s cash generative business model and expands KBR into new, adjacent vectors with minimal overlap with KBR’s heritage business.
- Compelling Long-Term Growth Opportunities Supported by Strong Revenue Synergies: Centauri is expected to be immediately accretive to earnings after transaction costs. KBR is well-positioned to extend Centauri’s track record of double-digit growth, benefitting from significant revenue synergies in attractive and growing federal sectors aligned with DoD and intelligence priorities that benefit from bipartisan support.
- Shared Culture Focused on People and Dedication to the Mission: KBR and Centauri employees share values centered on integrity, empowerment, transparency and accountability. With approximately 75% of Centauri’s 1,750 employees holding high level security clearances and half having doctoral and/or masters level degrees, the combined organization and its employees will be especially equipped to support the most demanding challenges from its customers.
- Aligned with the Most Strategically Important Priorities Across Space and Missile Defense: With funding shifting to address evolving threats, the updated U.S. Defense Space Strategy focuses on three objectives that the combined company will be well-suited to help advance: maintain superiority in space; ensure stability in space; and provide space support to U.S. and allied military operations.
Pro Forma Business Structure
As announced separately on August 6, 2020, in connection with KBR’s second quarter 2020 financial results, KBR is reshaping its portfolio to focus the company around two segments – Government Solutions and Technology Solutions. Following the completion of this acquisition, Centauri and its 1,750 employees will become part of KBR’s Government Solutions segment.
Financing and Approvals
The transaction has been unanimously approved by the KBR Board of Directors and the board of managers of Centauri and is expected to close in the fourth quarter of 2020, subject to certain regulatory approvals and customary closing conditions. KBR expects to fund the purchase price of approximately $800m with approximately $300m in cash on hand and $500m of debt.
Citizens Capital Markets, Inc. served as lead M&A advisor to KBR in this transaction. Bank of America served as co-advisor and Arena Strategic Advisors served as due diligence and transition advisor. Hogan Lovells US LLP acted as legal advisor to KBR in connection with the transaction.
Holland & Knight acted as legal advisor and Jefferies LLC acted as financial advisor to Centauri in connection with the transaction.
19 Aug 20. BAE Systems has strengthened its technology and data portfolio with a deal to buy Techmodal, a UK-based data consultancy and digital services company. Techmodal, which is based in Bristol and has approximately 120 employees and 30 associates, has a number of long term contracts with the UK Ministry of Defence (MOD) in support of the UK’s armed forces, particularly the Army, Strategic Command and Royal Navy. Their expertise complements BAE Systems’ existing digital, data and technical services capabilities.
Last year, the MOD launched the Defence Digital initiative which set out how it plans to increase digital capabilities across defence and the acquisition of Techmodal will help BAE Systems to support the armed forces in this transformation.
Techmodal’s capabilities strongly complement the digital and data services BAE Systems currently provides to the Royal Navy which has ambitions to become a fully ‘digital navy’ by 2025. These existing services include the Data Integration Platform (DIP), a collaborative system that provides the ability to view, manage and exploit data provided by multiple systems on the Queen Elizabeth Class aircraft carriers, allowing the efficient management of these highly complex modern warships.
Techmodal’s experience and expertise in data analytics, data science and digital transformation will strengthen BAE Systems’ ability to support not just the Royal Navy but all of the UK’s armed forces and other customers around the world.
Welcoming the deal, David Mitchard, Managing Director of BAE Systems’ Maritime Services business, said: “We are delighted to welcome the Techmodal team to BAE Systems. This deal will open up many new opportunities for both businesses and for our colleagues.
“Techmodal’s data expertise is highly complementary to our own digital capabilities and aligns well with our customers’ digital needs and ambitions.
“This acquisition allows us to work together to provide further support to the UK’s armed forces’ digital transformation as well as bringing the benefits of leading edge data-driven decision making to all of our customers.”
Gareth Vaughan, Techmodal’s Managing Director, said: “This deal is great news for Techmodal and our customers including the UK Defence community. BAE Systems provides Techmodal with a stable platform to build to the next level of success for our rapidly growing business. We are certain that it will offer our employees and our customers brand new and exciting opportunities.
“Fusing BAE Systems’ domain knowledge with our agile, consultative ways of working will enable us to bring our technical skills to wider internal and external markets and offer our partners a hugely capable new proposition for digital transformation and data led solutions.”
Techmodal becomes a wholly-owned subsidiary of BAE Systems with effect from today (Wednesday 19 August 2020).
18 Aug 20. Kymeta Corporation Accelerates Growth Objectives through Acquisition of Specialist Satellite Service Provider, Lepton Global Solutions.
Acquiring Lepton Global Solutions captures important synergies and accelerates Kymeta’s ability to pursue key opportunities with U.S. defense and government customers.
Kymeta Corporation (www.kymetacorp.com), the communications company making mobile global—is excited to announce the successful acquisition of Lepton Global Solutions LLC (www.leptonglobal.com), which will become a wholly owned direct subsidiary of Kymeta Corporation. Established in 2013, Lepton Global Solutions is a leading provider of satellite-based customized turnkey communications solutions and services with expertise in the Intelligence Community (IC), Special Operations Command (SOC) and other government sectors.
Acquiring Lepton combines critical capabilities and strengthens Kymeta’s ability to pursue key opportunities with U.S. defense and government customers in locations around the world. As a rapidly growing satellite communication services provider with a global and scalable network infrastructure, the company provides customized end-to-end connectivity solutions that can be deployed quickly and efficiently to meet the needs of customers wherever they are located.
Lepton currently hosts Kymeta’s satellite connectivity solutions. As a combined entity, the new offerings and capabilities bring unique, complete, bundled solutions to the market based on best-in-class technologies and tailored customer-centric services that meet and exceed customer mission requirements.
“Having a turnkey satellite service provider like Lepton accelerates Kymeta’s ability to successfully penetrate U.S. Military and Government customers in partnership with a well-established brand, deep channel experience, and network support for those verticals. The combination of Kymeta’s revolutionary hardware, together with Lepton’s service offerings, will be a winning combination that will be hard to beat. We are excited to bring Rob Weitendorf, Isabel LeBoutillier, and their team into the Kymeta family and thus expand and accelerate our ability to go to market,” said Walter Berger, President and COO of Kymeta.
“Government and commercial sectors need the most reliable and seamless connectivity to successfully fulfill their daily missions,” said Rob Weitendorf, Managing Partner at Lepton. “This new venture will enable our customers to leverage the expertise of Lepton and Kymeta to receive more customized services and solutions, while maintaining Lepton’s legacy of providing the best-of-breed solutions always with a focus on the customer’s mission.” Mr. Weitendorf goes on to say, “I can’t think of a better partner than Kymeta to launch this new era of connectivity with as we bring new offerings to the market in satellite and cellular communications around the world.”
“Given our existing working relationship, we recognize the synergies that even closer partnership will bring, and our whole team is very excited to be joining Kymeta. Our service-based background enriches the extensive industry knowledge and expertise already present at Kymeta, creating a truly collaborative powerhouse with cutting-edge capabilities in the satellite communications industry,” added Isabel LeBoutillier, Managing Partner at Lepton.
Together, Kymeta and Lepton will bring better solutions to the market as each company’s resources will enhance the other’s ability to meet customers’ needs. Current Lepton customers will experience no interruption in service in the short-term and will continue receiving Lepton’s full suite of products, services, and support. Over the long-term, customers will enjoy the benefits of the joint Kymeta-Lepton collaboration, and they will continue to build on Lepton’s established excellence as a satellite service provider and Kymeta’s unique product and services portfolio.
Kymeta is unlocking the potential of broadband satellite connectivity, combined with cellular networks, to satisfy the overwhelming demand for comms on the move and making mobile global. Lepton Global Solutions, part of Kymeta, hosts the company’s satellite connectivity solutions and offers unique, complete, and turnkey bundled solutions to the market based on best-in-class technologies and tailored customer-centric services that meet and exceed customer mission requirements. These solutions in tandem with the company’s flat-panel satellite antenna, the first of its kind, and Kymeta™ Connect services provide revolutionary mobile connectivity on satellite and hybrid satellite-cellular networks to customers around the world. Backed by U.S. and international patents and licenses, the Kymeta terminal addresses the need for lightweight, slim, and high-throughput communication systems that do not require mechanical components to steer toward a satellite. Kymeta makes connecting easy – for any vehicle, vessel, or fixed platform.
Kymeta is a privately held company based in Redmond, Washington. (Source: BUSINESS WIRE)
19 Aug 20. Hindustan Aeronautics rises 6%, nears 52-week high post Q1 results. HAL said the impact due to Covid-19 will be ‘minimal’ for the company as major portion of the company’s revenue is generated from Defense services.
Shares of Hindustan Aeronautics Limited (HAL) soared as much as 6.8 per cent to Rs 1,360 on the BSE on Wednesday after the company registerd a marginal increase in its consolidated revenue for June quarter of FY21 (Q1FY21).
The state-owned aerospace and defence company’s revenue increased 0.8 per cent year-on-year (YoY) to Rs 10,239 crore from Rs 10,149 crore in the year-ago quarter. Net profit for the quarter fell by 1 per cent YoY to Rs 1,226 crore from Rs 1,238.9 crore in Q1FY20.
On the operational front, HAL’s earnings before interest, tax, depreciation, and ammortisation (Ebitda) came in at Rs 2,470.8 crore as compared to Rs 2,599.6 crore in the year-ago period. Ebitda margins contracted 150 basis points (bps) to 24.1 per cent.
HAL said the impact due to Covid-19 will be ‘minimal’ for the company as major portion of the company’s revenue is generated from Defense services. Moreover, the Ministry of Defence had extended the contractual delivery date for a period of 4 months (March 25, 2020 to July 24, 2020) due to force majeure, it said.
“Impact (of Covid-19) on the future business in the long term is not anticipated currently,” it said.
At 10:35 AM, the stock was trading 1.14 per cent higher at Rs 1,287.90 as compared to 0.44 per cent gain in the S&P BSE Sensex. Around 5.01 lakh shares have changed hands on the NSe and BSE so far. The stock was trading close to its 52-week high level of Rs 1,423.55, hit on August 14, 2020.
Defence-related stocks have been in focus at the bourses recently after the Ministry of Defence, on August 9, announced a phased, year-wise embargo on the import of 101 items of defence equipment, invoking the Prime Minister Narendra Modi’s Atmanirbhar Bharat (Self-Reliant India) initiative.
“This decision will offer a great opportunity to the Indian defence industry to manufacture items on the negative list by using its own design and development capabilities or adopting the technologies designed and developed by the Defence R&D Organisation to meet the requirements of the Armed Forces,” Defence Minister Rajnath Singh had tweeted.
The announcement came soon after the Ministry of Defence came out with the draft Defence Production & Export Promotion Policy (DPEPP) 2020 to provide thrust to India’s defence production capabilities and promote exports.
Analysts at ICICI Securities said that while the government’s intent with the policy was good, the execution on ground would define its success.
“This would provide significant thrust to defence manufacturing companies in scaling up their production capabilities in long term. Companies like L&T, Bharat Electronics (BEL) and Cochin Shipyard (CSL) having strong indigenous capabilities are likely to benefit from this policy in the long run. However, the intent on the paper is good but the execution on ground in terms of rapid indigenisation, pick-up in ordering, allocation of funds to defence capital expenditure would be key monitorables to achieve the desired objectives of the policy,” it said. (Source: Google/https://www.business-standard.com/)
18 Aug 20. Pennant targets recovery. Pennant (PEN:33p), an Aim-traded supplier of products and services that train and assist engineers in the defence and civilian sectors, has been impacted by the Covid-19 pandemic more than management had anticipated when I suggested buying the shares, at 35p (‘Small-cap recovery buys’, 20 April 2020). Having traded in a 33p to 53p range since the end of March, the share price is now back at the bottom of that trading range on news that the £12.5m market capitalisation company will report a first half operating loss of £2m (excluding £500,000 of restructuring and one-off costs) on revenue down 12 per cent to £6.3m.
Guidance is for a return to profitability in the second half, but Pennant’s full-year revenue estimate of £14m will fall short of the £16m figure budgeted by management in the May 2020 trading update, and will be 30 per cent below revenue reported in the 2019 financial year.
Delays in key meetings, unavailability of relevant customer personnel, and the disruption and productivity impact of remote working have all held back progress on Pennant’s engineered-to-order programmes, while local lockdowns have prevented delivery and installation of training aids at customer sites overseas. One of these delayed contracts is a £3.4m award to design and build a full-size representation of a training aid for Leonardo Helicopters, of which £2m should have been deliverable this year.
In addition, restrictions in Canada and Australia have reduced budgeted services revenues in those territories. Pennant has government contracts (worth £6m in annual revenue) with the Canadian and Australian defence departments to use its Oracle-based OmegaPS software product that reduces the support cost of major capital equipment.
There is good news though. The latest order book of £36m is 9 per cent higher than at the time of the May trading update, annualised cost savings of £1m have been achieved, the benefit of which will be seen in 2021, and the group is now in a healthy £2m net cash position, representing a £4.2m positive turnaround since the 2019 annual results. Pennant has access to a £4m low-cost overdraft facility with HSBC, too, so there are no financial concerns.
Also, with operating costs taken out of the business, then a higher proportion of gross margin earned on incremental revenue will now drop through to profit as the bumper order book is delivered. It’s worth bearing in mind that prior to the Covid-19 crisis analysts had been pencilling in a two-thirds increase in pre-tax profits to £2.7m and EPS of 6.9p. This gives you some idea of the recovery potential on offer. On a bid-offer spread of 32p to 33p, the heavily oversold and unloved shares rate a recovery buy. (Source: Investors Chronicle)
17 Aug 20. MAG Aerospace Acquires Remotely Piloted Solutions. MAG Aerospace (MAG) has acquired Remotely Piloted Solutions (RPS), headquartered in Dallas, Texas. This acquisition adds over 300 C5ISR (Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance and Reconnaissance) professionals to MAG’s existing team of experts.
“RPS has grown considerably since our founding in 2013—from a small team of 10 employees to more than 300 C5ISR professionals. We thought hard on how best to continue to grow and provide exceptional service to our customers. MAG Aerospace represented the best option not only for RPS, but ultimately our customers, as well,” said Blake Stovall, RPS CEO and Founder. “Together, MAG and RPS offer capabilities no other organization can.”
“Our cultures and our values align so considerably that joining our capabilities to enhance our offerings just made sense. MAG provides exactly what we were seeking in a partner for the future: an environment for continued growth and success for all our employees,” said Phil Jones, RPS CSO and Cofounder.
RPS draws upon years of military experience and lessons learned performing hundreds of thousands of hours of C5ISR missions across a variety of platforms both manned and unmanned. In addition to their operational aircrew services, RPS’s mission-focused team also provides aircrew training, weapons and maintenance, research, development, test, and evaluation, and intelligence support services.
“When we think of flawlessly executing C5ISR mission and technology integration on large unmanned systems worldwide- RPS’ reputation is second to none,” said Joe Fluet, MAG CEO. “The rapid growth RPS has shown over the last few years is a testament to the fantastic leadership team that will be joining the MAG Aerospace team in making the world smaller and safer.”
Legal counsel was provided to RPS by Jackson Walker LLP. Legal counsel to MAG was provided by Ropes & Gray LLP and Cooley LLP.
About MAG Aerospace
MAG Aerospace, headquartered in Fairfax, Virginia, is a leader in providing and enabling real-time situational awareness to help its customers make the world smaller and safer. MAG delivers full spectrum C5ISR Services (integration, operations, training, and technical services) and other specialty aviation to federal, international, civilian, and commercial customers around the world. MAG’s team of 1,700+ professionals operate 200+ manned and unmanned special mission aircraft, delivering ~150,000 flight hours annually on six continents in support of its customers’ missions. For more information on MAG Aerospace, please visit www.magaero.com.
Remotely Piloted Solutions, LLC (RPS) is a leading provider of C5ISR services and mission solutions headquartered in Dallas, TX and founded in 2013. Since its founding, RPS has grown from a small team of just 10 employees to a cadre of more than 300 professionals performing on programs around the globe. Every hour of every day, RPS staff support the execution of ISR missions, capturing valuable data that informs strategic decisions and saves lives. Throughout RPS’s rapid growth, the company’s vision has remained to provide customers with the highest levels of support in the pursuit of becoming leaders in comprehensive aviation services. (Source: PR Newswire)
13 Aug 20. CACI expands C-UAS services with acquisition of Ascent Vision Technologies. US technology company CACI International has acquired Ascent Vision Technologies (AVT), a provider of counter unmanned aircraft systems (C-UAS) solutions; intelligence, surveillance, and reconnaissance (ISR) technology. According to a CACI press release, AVT provides electro-optical, infrared (EO/IR) imaging systems designed for airborne, ground, and maritime platforms, delivering effective ISR and target acquisition capabilities for day and night operations.
This proprietary imaging technology is utilised in AVT’s X-MADIS system, an on-the-move, mobile and fixed site, c-UAS solution that detects, locates, tracks, identifies, and defeats UAS threats. X-MADIS integrates radar, AVT’s gyro-stabilised optical sensors, and non-kinetic electronic warfare capabilities to provide a comprehensive solution to combating the threat of hostile UAS and near-peer airborne threats. X-MADIS can also provide ground and surface surveillance, counter-IED, hostile fire location, and integrated kinetic capabilities. In addition, AVTs gyro-stabilized optics, c-UAS software suite and graphical user interface are key components integrated into the US Marine Corps MADIS family of systems.
The acquisition combines AVT’s EO/IR and X-MADIS technologies with CACI’s signals intelligence, electronic warfare, and CORIAN capabilities. CACI says its open-source, system-of-systems architectures provides interoperability and speeds new capabilities to customers in the defense and security markets. AVT adds to CACI’s US Army and Navy presence with the US Air Force and Marine Corps, as well as international customers. (Source: www.unmannedairspace.info)
13 Aug 20. Speedcast Secures Equity Commitment From Centerbridge Partners. Speedcast International Limited (ASX: SDA) has received a US$395m equity commitment from Centerbridge Partners, L.P. and its affiliates, one of the company’s largest lenders.
This commitment would support a plan of reorganization, which has the support of both Centerbridge and the Company’s Official Committee of Unsecured Creditors. Centerbridge’s proposed US$395m equity investment provides the opportunity for Speedcast’s existing secured lenders to participate in the equity commitment on a fully pro-rata basis to support Speedcast’s emergence from its reorganization under Chapter 11 of the US Bankruptcy Code.
During the completion of the Chapter 11 process and under the new ownership structure, Speedcast remains focused on supporting the connectivity needs of its customers and fully intends to continue its global operations uninterrupted. The proposed plan would enable the Company, under the leadership of both Peter Shaper, Speedcast’s Chief Executive Officer, and Joe Spytek, Speedcast’s President and Chief Commercial Officer, to continue to execute on the transformation plan to refocus the business, which they initiated earlier this year after joining the organization in executive leadership roles.
Both Shaper and Spytek have extensive background in the communications and service provider sectors, each previously serving as chief executives for leading remote communications businesses. Centerbridge has also committed to providing, if needed, debtor-in-possession (DIP) financing of up to US$220m on favorable economic terms.
The Centerbridge DIP financing, if drawn, would be used to refinance the Company’s existing DIP financing, to fund the Company’s Chapter 11 plan process, and to ensure the Company can continue to meet its financial commitments while it works toward confirmation of the plan of reorganization. The plan will provide for cash payments to holders of secured claims.
A number of the company’s trade creditors are critical to its future and the plan will provide to those relevant trade creditors, a partial cash payment for those unsecured claims. Unsecured creditors generally will share in recoveries from a litigation trust, noting there is no certainty that any action would be undertaken or payment made from this trust.
The plan does not contemplate any recovery for existing shareholders, and existing shareholders would no longer have an equity interest in the reorganized Speedcast Group. Completion of the equity investment is subject to confirmation of the plan of reorganization and a number of other conditions, including various regulatory approvals and waivers.
Speedcast announced its decision to recapitalize its business through voluntary Chapter 11 proceedings on April 23, 2020. (Source: Satnews)
11 Aug 20. GoGo’s CA Division 4 Sale, Thaicom Net Profit, Up Intelsat Capacity Renewal. In-Flight Entertainment (IFE) and connectivity company, Gogo, is being hurt by the dramatic reduction in passengers on aircraft which is the backbone of its business — the company is laying off 143 full-time positions in their Commercial Aviation division and cutting salaries for all senior staff, including the CEO.
Gogo confirmed it is looking to sell its Commercial Aviation (CA) division.
“While Covid-19 has significantly impaired global commercial aviation travel and our results for the second quarter, we are encouraged by the strong recovery in business aviation as well as the beginnings of a recovery in global commercial aviation which has continued into August,” said Oakleigh Thorne, Gogo’s President/CEO. “Going forward, we are focused on maintaining the strength of our franchise and realizing the value of CA through a potential sale of the division.”
Gogo has appointed bankers to advise on the sale of the division.
CA, in North America, saw revenues plummet by 72 percent to $30 m (y-o-y) and not helped by the impact of the virus on North American air travel and, to a lesser extent, to the full impact of American Airlines switching to the airline-directed model and the de-installation of Gogo equipment from certain American Airlines aircraft during 2018 and the first half of 2019, said Gogo.
CA over the rest of the world saw revenues fall 67 percent to just $12 m (y-o-y).
The firm’s Business Aviation (BA) division also suffered, but not as much. Total revenue decreased to $54.6m, down 23 percent from Q2 2019, driven by declines in both service and equipment revenue caused by the negative impact of Covid-19.
The overall impact saw consolidated revenues of $96m, a decline of 55 percent and hurt by the loss of passengers on both domestic and international air travel. Gogo said, “BA reportable segment profit of $27.2m with nearly 50 per cent segment profit margin.”
Also being reported is that Thaicom has turned a Q1 net loss into a net profit for Q2; however, revenues continue to suffer from the economic downturn.
The shift in fortunes was largely down to compensation income and offsetting losses from foreign exchange, the company said. Cutting out these exceptionals and Thaicom’s profit was just Baht 2m (€0.05m).
The company’s net profit for Q2/2020 was Baht 498m, significantly improved from the net loss of Baht 135 m for Q2/2019 and Baht 198m for Q1/2020.
Thaicom reported revenue from sales and services for Q2/2020 of Baht 873m, down by 28 percent and 9.5 percent from Q2/2019 and Q1/2020, respectively, mainly as a result of a decrease of customer demand for broadband satellite services, along with customer churn from the Thaicom 5 satellite de-orbit.
The overall use rate for Thaicom 6, Thaicom 7, and Thaicom 8 as at the end of Q2/2020 was 63 percent, down from 65 percent as at the end of Q1/2020. For broadband satellite, on Thaicom 4, the utilization rate was 19 percent, decreased from 21 percent as at the end Q1/2020, mainly due to the drop of bandwidth consumption from overseas customers.
Satellite and terrestrial network operator Intelsat has been selected to continue distributing content for ViacomCBS Networks International (VCNI) in Central Europe, Eastern Europe and across the Asia Pacific region.
VCNI delivers premium content through notable brands such as BET, MTV and Nickelodeon to a worldwide audience of billions across both traditional and emerging platforms.
In the Central and Eastern European market, VCNI harnesses the extensive reach of Intelsat’s direct-to-home (DTH) platform on the 1 West video neighborhood to deliver its premium programming. The Intelsat 1 West neighborhood can reach more than 17.8 million viewers across the region.
In Southeast Asia, VCNI leverages the Intelsat 19 (IS-19) satellite to serve its distribution affiliates, including cable headends, throughout the region. The IS-19 video neighborhood can reach up to 70 million viewers in Asia Pacific.
VCNI will also continue to use Intelsat’s terrestrial uplink services to distribute its video content across key Asian and Central and Eastern European markets, including remote and hard-to-reach areas.
“We are proud to once again be selected as the partner of choice by ViacomCBS Networks International in distributing their premium content,” declared Intelsat Regional Vice President of North America Tim Schermerhorn. (Source: Satnews)
09 Aug 20. SES and Intelsat Unveils Their Numbers. Satellite operator SES has included the anticipated receipt of $3.97bn into its forecast accounts and coming its way as a result of the FCC’s C-band restructuring order — the first batch of cash will come into the company from “mid-2021. SES confirmed it is buying four more O3b/mPower satellites, which will result in a 90 percent increase in O3b’s throughput.
SES unveiled its Q2 numbers (to June 30th) which admitted the company was not immune to the impact of the Covid-19 virus and consequent lockdowns. “We anticipate a slowdown in the pace of new business in the second half of the year and have updated our financial outlook for the full year in view of the challenges faced by a number of our customers, particularly in Mobility and Sports & Events. We were quick and early to initiate exceptional one-off cost reduction measures of €40 – 60m for 2020 to mitigate the impact of Covid-19 on our bottom line and are tracking well against this target,” said SES.
The company’s far-reaching ‘Simplify and Amplify’ cost-savings programme is now well underway and it has closed offices, reduced staffing and made other cost reductions that will result in €40m-€50m of savings from 2021 onwards.
SES also confirmed the retirement of Romain Bausch, once CEO and more recently chairman of the company, who stepped step down from the Board of Directors in July.
The high spot in terms of divisional performance was its ‘Networks’ segment (now 41 percent of group revenue), up 7.1 per cent y-o-y and the third successive year of growth. ‘Mobility’, a sub-set of Networks, grew 22.6 per cent y-o-y.
However, Video, the backbone of the company because of its DTH contract, fell badly by 8 percent “from ‘right-sizing’ of capacity by customers in mature markets, and the decision to reduce exposure to low margin video services activities contributing to lower Services revenue (-9.6 percent),” said SES.
Fully protected contract backlog at June 30, 2020, was €5.9bn (gross backlog of €6.4bn when including backlog subject to contractual break clauses).
Steve Collar, CEO/SES, said, “The business has performed well in the first half of the year, delivering solid revenue in challenging trading conditions, while the benefits of the proactive cost-saving measures that we took early in the development of Covid-19 are also seen in our H1 results. We were particularly pleased to sign a broad distribution agreement with BBC Studios during the quarter, underlining our ability to support premium customers across a range of satellite and terrestrial distribution methods as well as significant extensions with ProSieben in Germany and Austria. On the Networks side, we are seeing a pickup in our Government business after a slower first half, with a new and innovative use of the O3b constellation for the US Government among a number of important deals won and signed in the second quarter.”
Additionally, Intelsat’s Q2 results, to June 30th, were not impressive, as the company is in Chapter 11 bankruptcy reconstruction as a ‘debtor in possession’ and it is near-certain that it will exit bankruptcy in a stronger position; however, at the moment, the negative news is extensive.
- Network Services (worth 37 per cent of Intelsat’s total revenues) fell 5 percent to $176.7m.
- Media (42 per cent) fell a worrying 9 per cent to $202.6m.
- Government (20 per cent) rose a useful 3 per cent to $96.1m.
The changes contributed to a total of $482m in revenue (down 5 percent), but a net loss of $405.4m for the quarter. However, the loss was ‘better’ than that incurred a year ago which was $529.7 m (Q2/2019).
The company spent $298.7m on reorganisation connected with its Chapter 11 position.
Intelsat’s CEO, Stephen Spengler, said, “Our business demonstrated resiliency in a challenging operating environment, highlighted by a sequential quarterly increase in revenue and Adjusted EBITDA largely from the successful execution of a new agreement with Speedcast in our network services business. Financial results, when compared to the same period last year, reflect the ongoing challenges in our network services business due to the impacts of COVID-19 on cruise in maritime and aeronautical in mobility, despite our booking new business in merchant maritime and enterprise network applications. The decline in the media business was driven by ongoing secular headwinds that we have experienced over several quarters. Finally, the government services business delivered year-over-year growth in revenues resulting from strong uptake of third-party services and growth in our new FlexGround managed services.”
Spengler said that Intelsat would be delivering further comments to the FCC next week (on August 14th) as to its C-band transition plan.
Intelsat’s fill rate was 75.1 percent (down on the previous quarter’s 78.5 per cent) and contracted backlog was down $200m to $6.4bn. (Source: Satnews)