Small-rocket-builder Avio raises $66 million through stock listing

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WASHINGTON — Italian launch vehicle producer Avio has raised 60 million euros ($65.6 million dollars) by selling slightly over two thirds of the company’s shares on Italy’s stock exchange.

Colleferro, Italy-based Avio, producer of the light-lift Vega launcher for launch service provider Arianespace, started trading on the Italian stock exchange April 10 and now has 68 percent of its shares trading in the market.

In an interview with SpaceNews, Avio CEO Giulio Ranzo said the decision to go public was driven by anticipated higher demand for Vega launches. During its first disclosure of full-year results as a public company, Avio reported 292 million euros in revenue, a 13.4 percent rise over 2015.  Adjusted earnings before interest, taxes, depreciation and amortization were 36.5 million euros, a 2.7 percent rise.

“Opening ourselves toward the capital market at a time when the business is evidently growing through new commercial demand requires that we have flexibility to collect new financial resources to accelerate our investments,” said Ranzo. “Therefore, it seemed to us a very natural step considering what is happening in our sector at the moment.”

Ranzo said Avio has yet to decide how it will apply the 60 million euro raised through the public listing, but that the company can use it whenever it deems fit. “It is cash in the bank,” he said.

Those resources will go toward new projects after the Avio board of directors decides on its applications. Ranzo said the listing was “extremely successful” and validated Avio’s year-long preparation for the public offering.

As part of the public listing, aerospace and defense company Leonardo doubled its stake in Avio from 14 percent to 28 percent. Ranzo said Leonardo maintains the role of a minority, non-controlling shareholder in the rocket company. Another 4 percent of Avio belongs to 44 members of the company’s management team, two of which are on its board of directors. The remaining 68 percent is divvied up between Italian entrepreneurs, small private banks from Italy and some larger institutional international investors, Ranzo said.

Marketing Vega

Avio’s Vega rocket, sold by Evry, France-based Arianespace, first launched in 2012 after nine years of development work, and has performed nine launches in total, all successes. The majority of those missions so far have been for the European Space Agency, a situation Ranzo described as unique because of the newness of the launch system and the need to industrialize the product.

“We have now entered the phase that contains a lot more commercial customers and what I would call international export customers,” he said, referencing Vega’s 2016 launches of PeruSAT-1, four Google-Terra Bella SkySats and Turkey’s Göktürk-1. Vega entered full commercial service in 2015.

Ranzo said Avio is currently organized to launch around three times per year, but could do more based on customer demand. So far the rocket has launched once or twice a year on average, and is on track for three launches this year. The smallsat market is one where Avio is finding “tremendous market interest,” he said. With ESA, Avio is preparing a new dispenser that can deploy 20 to 30 small satellites in multiple different orbits. That mission is currently slated for 2018.

Vega C and Vega E

Ranzo said the development of Vega C, the near-term successor to Vega capable of lifting 2.3 metric tons to low-Earth orbit, is on track for its 2019 debut. Avio completed the insulated motor case for the P120 solid propellant booster used for the first stage of Vega C and the strap-on solid rocket boosters for the forthcoming Ariane 6, and is performing X-ray testing now, he said. The insulated motor case forms the outside structure of the engine.

Avio has also completed the first Zefiro-40 second stage engine for Vega C, Ranzo said.

The company is building a new factory for P120 engines that is scheduled for completion by the end of the year. But even before that, Ranzo said, Avio will start operations in the facility the summer.

Until 2021 or 2022, Italy will be the sole producer of the casings for the P120, after which OHB-subsidiary MT Aerospace in Germany will kick off another production line. Ranzo said that although Germany got the contract to build the additional motor cases, the technical responsibility for their production remains with Avio, making MT Aerospace a supplier to Avio.

Vega E, Avio’s long-term vision for Vega, is designed to carry three metric tons to low-Earth orbit using a three-stage design instead of Vega C’s four stages. Timed for debut in 2024, Ranzo said Vega E will use the P120 and Z40 engines, combined with an entirely new liquid upper stage that runs on liquid oxygen and methane. That upper stage will have the ability to deploy multiple satellites into more diverse orbits than previous iterations of the rocket, Ranzo said.

Ranzo said Avio is sticking to expendable designs for its rockets, but is positioning itself to pivot to reusability if deemed profitable.

“For Vega we do not believe yet we would have any benefits by moving toward reusable technology, but by nature of the type of technology we are developing with the lox-methane, we will be anyway prepared to consider also this technology if we do see economic benefits out of it,” he said.

Ranzo said Avio has a prototype of the new liquid upper-stage engine, from which it will derive the final design.