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Follow on Google News | Export Banks May Soon Decide on Jabiru SATCOM FinancingShareholders are likely to find out this month whether NewSat will be awarded $230 million in SATCOM funds.
By: NewSat "Shareholders are likely to find out this month whether NewSat will be awarded $230 million," he said. The loans would come from US-controlled Export-Import Bank (Ex-Im Bank) and the French counterpart Compagnie Française d’Assurance pour le Commerce Extérieur. The banks will play a critical role in completing the Jabiru-1 satellite as scheduled. The amount is roughly two-third of the cost of the satellite project. If approved, the loans are expected to pull up NewSat stock price. "Securing the soft loans will spark a re-rating of the stock, " Mr. Lau said. NewSat is expected to launch the satellite in the fourth quarter of 2014. Lockheed Martin, the manufacturing contractor, has started building the Ka-band satellite last year. Bullish investors cite the case of Avanti shares which saw a huge capital gain after Ex-Im Bank had extended loans to the satellite communications provider in 2009. The bank financed the HYLAS 2 spacecraft, and the good news drove Avanti stock price 60% higher year-on-year, on top of 180% gain in the preceding year. NewSat already saw a twofold increase in value since 2011, and the SATCOM stock trend could change abruptly depending on bank decisions. But Mr Lau thinks that faring well in the financial market could displease some investors, particularly those who are concerned with share dilution.The approval of bank loans will make it easier for NewSat to raise more capital to finance the succeeding Jabiru satellites, which could prompt some shareholders to buy more SATCOM stocks to avoid getting diluted out. For more information, visit http://www.newsat.com End
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