Virgin Orbit to take stake in Sky and Space Global
WASHINGTON — Virgin Orbit plans to invest in Sky and Space Global (SAS), the financially troubled satellite constellation company, and partner with it on launch and satellite services.
In an Oct. 28 statement, SAS said that Virgin Orbit will take a stake of no less than 14.7% in the company by purchasing shares at a price of $0.20 Australian ($0.14) each. Virgin Orbit will also receive options to purchase seven million additional shares at $0.40 each over the next three years, and appoint an observer to the SAS board of directors.
The company didn’t disclose the size of the investment Virgin Orbit was making, but a separate filing with the Australian Securities Exchange (ASX) stock market the same day disclosed that SAS planned to sell 11 million shares at $0.20, or $2.2 million Australian.
In exchange for the investment, the companies will cancel a previous launch agreement valued at $55 million Australian. SAS will sign a three-year “launch services and consulting agreement” with Virgin Orbit for $1 million per year. The two companies will also agree to promote each other’s services.
“We are delighted to have Virgin Orbit as a partner and shareholder as we progress the recapitalization of the business and short-term commercialization of our nanosatellite communications technology,” Xavier Kris, chairman of SAS, said in the statement.
SAS entered voluntary administration, a form of bankruptcy protection, in Australia in April after it failed to raise funding. Kris joined the company in July as part of the reorganization of the company.
SAS proposed to launch a constellation of 200 cubesats to provide communications services, but struggled to raise funding after launching an initial three satellites in 2017. SAS signed a contract with Danish smallsat manufacturer Gomspace to build its constellation, but missed payments led Gomspace to consider the contract canceled.
Virgin Orbit confirmed it’s planning to invest in SAS to help it recapitalize, but noted that the agreement has yet to be finalized.
“Sky and Space Global’s new management team has offered to grant equity and options to Virgin Orbit as a component of a new agreement that best suits their ongoing recapitalization efforts,” Stephen Eisele, vice president of business development at Virgin Orbit, said in a statement to SpaceNews. “There are a few conditions still to be met as part of that new agreement process, but we are excited to accommodate our customers with a plan that works well for their context and their requirements.”
Eisele added that Virgin Orbit expects this investment will allow SAS to eventually launch its satellites with the company. “We are excited about SAS’s mission and team, and we look forward to providing launch services for their satellites onboard LauncherOne.”