The bailout for Sky and Space Global (SAS), a satellite constellation facing financial difficulties, came in the form of Virgin Orbit with the company planning to invest in SAS and partner in launch and satellite services. In a statement given on 28 October, SAS disclosed that Virgin Orbit would acquire not less than a 14.7 percent stake by purchasing each share at $0.20 Australian ($0.14). Virgin Orbit is also expected to have the option to buy a further seven million shares at $0.40 each in the coming three years and also have an observer in the SAS board of directors.
Although the magnitude made on the company by Virgin Orbit was not disclosed, a different filing in the Australian Securities Exchange (ASX) stock market indicated that SAS intended to auction 11 million shares at $0.20 or $2.2 million Australian. To pave the way for the investment, the two parties will be required to terminate an earlier launch agreement valued at $55 million Australian. The two companies will then sign a three-year deal that will see SAS receive $ 1 million each year from Virgin Orbit. The companies are also expected to agree to and promote each other’s services.
SAS chairman Xavier Kris echoed his delight to have partnered with Virgin Orbit both as a partner and a stockholder in this crucial time. The company is working on the recapitalization of its operations short-term commercialization of its nanosatellite communication technology. Kris joined the company July this year as part of a company shuffling after SAS entered voluntary administration, a form of bankruptcy fortification after failing to raise funds. SAS had projected to launch a constellation of 200 CubeSats to offer communication services but were unable to raise the required funds after the initial launch of three satellites back in 2017. SAS, which had entered a contract with Danish smallsat builder GomSpace to construct its constellation, failed to make payments prompting the latter to cancel the contract.
According to Stephen Eisele, the vice president of business development at Virgin Orbit, the new management at SAS had offered to allocate equity and options to Virgin Orbit as part of a new agreement that favors their current recapitalization efforts. Though Virgin Orbit confirmed its plan to invest in SAS, the company stated that the deal was yet to be completed. According to Eisele, this intervention is meant to help SAS launch its satellites together with Virgin Orbit. He said that his company was thrilled with SAS’ mission and team and was eager to help them launch their satellites aboard the LauncherOne.