Bankrupt Sea Launch Gets Another Funding Tranche
PARIS — Commercial launch-services provider Sea Launch Co., which has been in Chapter 11 bankruptcy proceedings since June, on Feb. 25 received $3 million in cash from the same group of investors that provided an initial tranche of financing to keep the company in operation, according to documents filed with the Delaware Bankruptcy Court.
Further payments totaling $9 million will be distributed in three monthly increments starting in March on condition that Long Beach, Calif.-based Sea Launch begins to secure commercial launch contracts, according to court documents.
Sea Launch’s current financial backers have set specific requirements that the company sign up to six launch contracts in order to receive the full $12 million, according to court documents.
The court has scheduled a hearing for March 17 on the funding plan.
A group identifying itself as Space Launch Services () LLC and the Heinlein Prize Trust, apparently consisting of the same people, has been paying Sea Launch’s currently minimal operating expenses since the Chapter 11 bankruptcy filing. This group is presumed to be among those who will take Sea Launch out of Chapter 11 bankruptcy, perhaps as soon as this summer.
Whether these investors intend to finance the approximately $50 million a year or more in Sea Launch operations costs, and support the company until it resumes business operations and regular cash flow, is unclear. Space Launch Services has declined repeated requests to disclose its financial resources and its intentions.
Satellite fleet operatorof Washington and Luxembourg has said publicly it would help Sea Launch return to operations in keeping with Intelsat’s goal of maintaining a broad base of commercial launch providers. Intelsat has an undetermined number of launch contracts with Sea Launch, although their exact status since the Chapter 11 filing remains unclear.
“Receipt of our second tranche of DIP [debtor in possession] financing represents an indication not only of the progress we’re making toward realizing our exit strategy, but also our strong relationship with SLS and their commitment to Sea Launch, for the purpose of sustaining reliable commercial access to space,” Sea Launch Chief Executive Kjell Karlsen said in a Feb. 26 statement. “All of the elements in this process are coming together in a timely manner. Our customers are also participating in this process, with their discussions for scheduling our launch services.”
Sea Launch uses a heavy-lift rocket built by Russian and Ukrainian companies that launches from a converted Norwegian floating oil platform that is positioned on the equator in the Pacific Ocean, in international waters, for launch campaigns.
Despite substantial investment from Chicago-based Boeing Co., Sea Launch’s diverse international supplier base and its launch base outside of anyone’s national territory has prevented it from being considered a U.S. rocket eligible to launch U.S. government satellites. It has thus depended entirely on the commercial market.