http://www.spacenews.com/launch/091111-bankrupt-sea-launch-gets-new-financing.htmlBankrupt Sea Launch Gets New Financing
PARIS — Unidentified investors operating under the name Space Launch Services LLC have agreed to provide initial financing to Sea Launch Co., the commercial launch provider that is in Chapter 11 bankruptcy proceedings, according to bankruptcy court records and Sea Launch President Kjell Karlsen.
Karlsen said in a Nov. 11 interview that the backers are strategic, not financial, and ultimately want to manage Sea Launch through bankruptcy and a return to commercial activity. He specifically said they were not private-equity investors but companies with a long-term interest in the space industry.
“These are people who are interested in access to space,” Karlsen said. “They believe Sea Launch will give them that. They are people who have worked in the past with one of our partners and whom we know.”
Karlsen said Space Launch Services has agreed to provide $5 million immediately and another $7.5 million in early December at a hearing scheduled by the Delaware Bankruptcy Court overseeing Long Beach, Calif.-based Sea Launch’s reorganization.
Karlsen said the $12.5 million should be enough to carry Sea Launch through February. He said he still expects Sea Launch to emerge from Chapter 11 bankruptcy in the spring.
The world’s three largest commercial satellite fleet operators — Intelsat of Bermuda and Washington; SES of Luxembourg; and Eutelsat of Paris — all submitted statements to the court on behalf of Sea Launch, Karlsen said. In addition to wanting access to a broader supply of commercial rockets, all three of these companies are among Sea Launch’s unsecured creditors because of launch contracts that are now at risk in the Chapter 11 proceeding.
Sea Launch lofts commercial telecommunications satellites from a converted Norwegian floating oil platform using the Russian- and Ukrainian-built Zenit 3 rocket. Sea Launch, whose founding investors include Chicago-based Boeing Co., entered bankruptcy in June.
Karlsen said Space Launch Services is one of three investor groups that had offered to provide what is known in bankruptcy proceedings as debtor-in-possession (DIP) financing. DIP finance providers generally position themselves to take an ownership stake in the bankrupt company, and Karlsen said that is the case for Sea Launch.
With the Nov. 10 approval of the bankruptcy court, Sea Launch accepted Space Launch Services’ offer above the other two because it carried far more favorable interest and payment terms, Karlsen said.