TAMPA, Fla. — Thuraya is providing Swiss small satellite operator Astrocast a $17.5 million financial lifeline in a deal that marks the Emirati company’s first investment in a low Earth orbit (LEO) constellation.
The companies said April 3 they had agreed on terms for a convertible loan that Thuraya could later turn into shares in cash-strapped Astrocast, which saw plans to raise money for its constellation on the stock market fall apart last year.
Astrocast currently operates 18 satellites and is looking to expand its fleet to improve connectivity services for Internet of Things (IoT) devices.
Thuraya, the mobile satellite services subsidiary of geostationary orbit (GEO) operator Yahsat, provides the L-band spectrum that Astrocast uses to connect IoT devices for tracking, monitoring, and other applications in remote locations.
The companies entered into a four-year technical cooperation agreement for the spectrum in 2019, and said they are currently exploring ways to extend this deal for another four years as part of the investment.
Yahsat CEO Ali Al Hashemi said the operators are seeking “ways to expand our service offering across GEO and LEO” in a satellite IoT market forecasted to generate more than $6 billion in cumulative revenues over the next four years.
Astrocast recorded 287,000 Swiss Francs ($313,000) in revenues for the six months to the end of June 2022 in its latest financial results, after launching initial commercial services earlier that year.
The company is due to publish financial results May 26 for the rest of 2022.
Capital for growth
Astrocast trades shares on Norway’s Euronext Growth Oslo stock market and was seeking to raise funds via a secondary listing in France last year before running into volatile financial markets.
The company had said in May it needed to raise 43 million Swiss Francs by the end of 2022 to keep its expansion plans on track.
Before shelving the secondary listing, these plans included having 20 satellites in LEO by the end 2022, 40 in 2023, and a constellation of 100 satellites by 2025.
The failure to list shares on France’s Euronext Growth Paris junior stock market also derailed plans to buy Dutch remote monitoring specialist Hiber, which would have supported Astrocast’s expansion into the Americas to provide global services.
Although Astrocast has not ruled out a secondary public listing, the company has been busy discussing alternative funding options with existing and potential partners.
The Swiss operator said Feb. 15 it has secured convertible loans from existing shareholders worth 7.4 million Swiss Francs to support its operations.
W11 Capital Management, an investment firm with ties to Astrocast board member Jon Cholak, also bought treasury shares in the operator March 17 worth about 411,000 Swiss Francs.