RSC Energia in Relation to ILS International Launch Services, Inc.

Mass media information and that of the official web-site of ILS International Launch Services, Inc. makes it believe that S.P.Korolev RSC Energia is still taking an active part in ILS International Launch Services, Inc. (ILS).

Actually it is not the fact. RSC Energia has been debarred from any meaningful participation in ILS in the recent years.

The history of ILS goes back to the Russian Government Order No 2349-r of December 16, 1992 that authorized Khrunichev Enterprise “to set up a joint enterprise with Lockheed Corporation according to the established order with the purpose to conduct marketing operations in the international market of space services”.

In 1993 Lockheed, Khrunichev Research and Production Space Center (KRPSC) and RSC Energia signed the “Joint Venture Agreement”, creating a joint business enterprise registered in the State of Delaware (USA) as the Joint Stock Company Lockheed Khrunichev Energia International, Inc (LKEI).

In 1995 Lockheed merged with Martin Marietta creating the Lockheed Martin Corp. Lockheed Martin and LKEI set up on a parity basis a Russian-American Company under the name of International Launch Services, Inc. with the purpose of marketing space services using Proton LV and American Atlas.

However in October 2006 Lockheed Martin Corp. quit the project and sold all its shares (51% in LKEI and 50% in the International Launch Services, Inc.) to a company registered in the British Virgin Islands, namely to Space Transport, Inc.

Right after the deal was done International Launch Services, Inc. merged with Lockheed Khrunichev Energia International. LKEI that survived the merger was renamed into “ILS International Launch Services, Inc.” Under this name the surviving company once again was registered in the State of Delaware as an American company.

In May 2008 Khrunichev Research and Production Space Center acquired the entire Space Transport, Inc. block of shares in ILS.

Notwithstanding the fact that RSC Energia remains to be the ILS International Launch Services, Inc. shareholder (owning 17% of the whole equity capital), its participation in the Company is rather formal than real. Energia is not in the position to influence the decision making process. Repeated attempts that RSC Energia took over the recent years to get representation in LKEI or ILS Board of Directors proved to be futile. The Board of Directors of the present company – ILS International Launch Services, Inc. – is represented exclusively by KRPSC and American managers.