USCG Gives Warning to Orbcomm

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  Space News Business

USCG Gives Warning to Orbcomm

By PETER B. de SELDING
Space News Staff Writer
posted: 14 May 2007
04:09 pm ET


PARIS — The U.S. Coast Guard (USCG) has given Orbcomm Inc. until July 2 to launch a Coast Guard-financed spacecraft or face penalties, Orbcomm said.

The Coast Guard warning, delivered to Ft. Lee, N.J.-based Orbcomm April 20, threatens “contractual or statutory” penalties unless the satellite, whose original launch date was in mid-2006, is operational by then, Orbcomm said in a submission to the U.S. Securities and Exchange Commission (SEC).

Orbcomm, which completed an initial stock offering on the U.S. Nasdaq exchange in November, is seeking to raise about $30 million in an additional offer of shares expected to occur in the coming weeks. Its disclosure of the Coast Guard deadline, which the company said it has not fully accepted, is part of documentation filed April 27 as part of the new share issue.

“We continue to be in discussion with the U.S. Coast Guard and our launch service providers to secure an acceptable launch date and a successful resolution of this matter,” Orbcomm said in its SEC filing.

Orbcomm, which operates a satellite-based messaging service for a variety of uses including machine-to-machine communications, plans to use the proceeds from its secondary stock offering to add features to its next-generation satellite system. A prime contractor for this system was to have been selected early this year. Orbcomm said it now expects a contract for 18 second-generation satellites to be signed by this fall .

As it completes the design of its second-generation system, Orbcomm is bolstering its existing constellation with the launch of the Coast Guard satellite, known as the Concept Validation Project, and six additional satellites being completed by Orbital Sciences Corp. of Dulles, Va., and OHB System of Bremen, Germany.

The six Quick Launch satellites are scheduled for launch this year. It remains unclear whether this group will be launched together with the Coast Guard spacecraft, which includes a payload to permit the Coast Guard to test an Automatic Identification System to monitor ships approaching the U.S. coastline.

The Coast Guard paid $7.2 million for this satellite in December 2006. Orbcomm said the launch, on a Russian Cosmos rocket, slipped when a co-passenger for the launch did not turn up. The company has been seeking an alternative launch since then.

Orbcomm operates a constellation of 29 functioning satellites in low Earth orbit. The constellation was designed as a 35-satellite system when it was launched in the late 1990s, but five spacecraft failed several years ago. In April, another satellite failed, leaving 29 operational spacecraft. The company said the loss of this spacecraft has not materially undermined system performance, and that it expects the current fleet to function acceptably well until the second-generation satellites are in orbit starting in late 2009.

The company estimates that launching the Coast Guard satellite, plus the six Quick Launch spacecraft, plus building and launching 18 next-generation satellites will cost $175 million.