Sea Launch files for Chapter 11 protection

[edkyle99]

'Gotta wonder how Boeing can lose $750 million on Sea Launch while the other original investors seem good to go.

Beware, Orbital.

There are no parallels between Boeing - Sealaunch and OSC - Taurus II

The details differ, but there is one critical common player - Yuzhnoye/Yuzhmash.

 - Ed Kyle

[Jim]

'Gotta wonder how Boeing can lose $750 million on Sea Launch while the other original investors seem good to go.

Beware, Orbital.

There are no parallels between Boeing - Sealaunch and OSC - Taurus II

The details differ, but there is one critical common player - Yuzhnoye/Yuzhmash.

 - Ed Kyle

It is less of a common player compared to PWR with RL-10 for EELV's

Yuzhnoye/Yuzhmash is a minor partner in Sealaunch but nearly supplies a whole vehicle.

Yuzhnoye/Yuzhmash is a supplier for OSC and only supplies the first stage tanks.

Yuzhnoye/Yuzhmash has not been an issue for Sealaunch

[SIM city]

Yuzhnoye/Yuzhmash did not make it whole out of SL.  They are the third largest claimant with $140M in trade debt.  That doesn't include the loans they have taken out to cover cost overruns on their fixed price and below cost contracts with SL.

Energia is next on the list with $74M in trade debt but, that's a small fraction of their financial problems.

SL had many problems that you can point to and the supply chain was one of them.  Keep in mind all of the contracts that were cancelled over the last few years and all of the money paid to date on the remaining contracts.  Where is the hardware???

[edkyle99]

Yuzhnoye/Yuzhmash is a supplier for OSC and only supplies the first stage tanks.

It is more than "tanks" in my mind.  Orbital says that Yuzhnoye/Yuzhmash is designing and supplying "Stage 1 Core Structures and Fueling Systems".  They'll be shipping this stage to the launch site.

 - Ed Kyle

[Jim]

Yuzhnoye/Yuzhmash is a supplier for OSC and only supplies the first stage tanks.

It is more than "tanks" in my mind.  Orbital says that Yuzhnoye/Yuzhmash is designing and supplying "Stage 1 Core Structures and Fueling Systems".  They'll be shipping this stage to the launch site.

Tanks and stage structure are synonymous

Orbital will attach the engines and avionics at the launch site.

[edkyle99]

Yuzhnoye/Yuzhmash is a supplier for OSC and only supplies the first stage tanks.

It is more than "tanks" in my mind.  Orbital says that Yuzhnoye/Yuzhmash is designing and supplying "Stage 1 Core Structures and Fueling Systems".  They'll be shipping this stage to the launch site.

Tanks and stage structure are synonymous

Orbital will attach the engines and avionics at the launch site.

"Fueling systems" could cover a lot of ground.  Propellant lines, yes, but what about valves and regulators and sensors and propellant loading and monitoring control systems, etc.?  What about wiring harness and pressure control lines, etc.?  (For example, "U.S." car manufacturers rarely use "U.S." wiring harness, etc., any more.)

 - Ed Kyle

[McDew]

Latest status on the Sea Launch Bankrupcty from Court Motions last week.

1)  SL has requested a 60 day extension, until June 18, 2010 to file their reorganization plan.  Hearing on the motion is scheduled for May 12th, with any objections due on May 5th. SL has already filed and recieved two 90 days extensions previously.

2)  The Heinlein Trust has refused to provide Sea launch the next DIP funding Draw of $3M on the grounds that Sea Launch failed to satisfy one or more conditions in the DIP financing agreement.

3)  Motion filed to select Energia Overseas Ltd. (a Russian limited liability company) to replace SLS/Heinlein Trust for the DIP Financing.  Energia Overseas Ltd has provided a DIP financing commitment of $30M. 

$30M will be used as follows:
a) $18.5M to pay off SLS/Heinlein Trust DIP financing agreement,
b) $4M to replaced the $3M payment not provided by Heinlein Trust last week ,
c) $5.5M of additional liquidity and
d) $2M charged for loan origination fee. 

Loan terms not as favorable as provided by SLS deal, interest rate now at LIBOR plus 750 basis points.

[kq6ea]

I keep wondering how much longer this will go on.

[edkyle99]

I keep wondering how much longer this will go on.

It could last for years.  I'm familiar with bankruptcy cases that extended for nearly a decade.  I wouldn't be surprised to learn of some that lasted even longer.

No matter what happens, Sea Launch as we knew it seems to be history.

 - Ed Kyle

[Danderman]

Latest status on the Sea Launch Bankrupcty from Court Motions last week.

1)  SL has requested a 60 day extension, until June 18, 2010 to file their reorganization plan.  Hearing on the motion is scheduled for May 12th, with any objections due on May 5th. SL has already filed and recieved two 90 days extensions previously.

2)  The Heinlein Trust has refused to provide Sea launch the next DIP funding Draw of $3M on the grounds that Sea Launch failed to satisfy one or more conditions in the DIP financing agreement.

3)  Motion filed to select Energia Overseas Ltd. (a Russian limited liability company) to replace SLS/Heinlein Trust for the DIP Financing.  Energia Overseas Ltd has provided a DIP financing commitment of $30M. 

$30M will be used as follows:
a) $18.5M to pay off SLS/Heinlein Trust DIP financing agreement,
b) $4M to replaced the $3M payment not provided by Heinlein Trust last week ,
c) $5.5M of additional liquidity and
d) $2M charged for loan origination fee. 

Loan terms not as favorable as provided by SLS deal, interest rate now at LIBOR plus 750 basis points.

This is a very interesting development - it looks like Excalibur Almaz is completely out of the deal, and that RSC Energia has caused $30 million to materialize from somewhere to pay for more SeaLaunch bankruptcy action.

[kq6ea]

I keep wondering how much longer this will go on.

It could last for years.  I'm familiar with bankruptcy cases that extended for nearly a decade.  I wouldn't be surprised to learn of some that lasted even longer.

No matter what happens, Sea Launch as we knew it seems to be history.

 - Ed Kyle

Ahhhh...I didn't know they could keep on asking for extensions.
It sure was a wonderful place to work at.
I wish them well, but with hardly anyone left, it's going to take them quite a while to get things turned back on and operating properly.
Jim

[Danderman]

I have been thinking about this $30 million investment by Energia a little more, its certainly not the kind of money that would be thrown around without a lot of thought.  Lets look at what they might get out of it: the principal assets are the launch pad and the command ship.

Are is the Long Beach facility, much of which is owned by Astrotech, really necessary for an Energia owned SeaLaunch? What if Energia simply moved the launch pad and boat to some other region, say, Venezuela, and ran the operation without any US support? If not Venezuela, some other area reasonably close to both the equator with an international air strip near a large dock. The satellites could be flown in, transferred to the command ship, and integrated with the Zenit inside the command ship by Russian personnel, or whoever does it for Proton launches.

The Boeing hardware could be stripped out of the payload adapter, which would give a little additional payload mass; I am presuming that the adapter that Proton uses for Block DM could be used on Zenit, as well, or whatever LandLaunch uses.

Perhaps an entity similar to ILS could be setup for marketing.

[Jim]

1.  Are is the Long Beach facility, much of which is owned by Astrotech, really necessary for an Energia owned SeaLaunch? What if Energia simply moved the launch pad and boat to some other region, say, Venezuela, and ran the operation without any US support? If not Venezuela, some other area reasonably close to both the equator with an international air strip near a large dock. The satellites could be flown in, transferred to the command ship, and integrated with the Zenit inside the command ship by Russian personnel, or whoever does it for Proton launches.

2.  The Boeing hardware could be stripped out of the payload adapter, which would give a little additional payload mass; I am presuming that the adapter that Proton uses for Block DM could be used on Zenit, as well, or whatever LandLaunch uses.

1.  It would need a facility like Astrotech no matter where it goes.  The spacecraft are tested, prop loaded and encapsulated in the facility.  So 100k clean room, SCAPE rated facility and room for vertical encapsulation. 

2.  Boeing does more than the adapter, the whole nose fairing.

You are forgetting ITAR.   It can't be just any country.

[edkyle99]

1.  Are is the Long Beach facility, much of which is owned by Astrotech, really necessary for an Energia owned SeaLaunch? What if Energia simply moved the launch pad and boat to some other region, say, Venezuela, and ran the operation without any US support? If not Venezuela, some other area reasonably close to both the equator with an international air strip near a large dock. The satellites could be flown in, transferred to the command ship, and integrated with the Zenit inside the command ship by Russian personnel, or whoever does it for Proton launches.

2.  The Boeing hardware could be stripped out of the payload adapter, which would give a little additional payload mass; I am presuming that the adapter that Proton uses for Block DM could be used on Zenit, as well, or whatever LandLaunch uses.

1.  It would need a facility like Astrotech no matter where it goes.  The spacecraft are tested, prop loaded and encapsulated in the facility.  So 100k clean room, SCAPE rated facility and room for vertical encapsulation. 

2.  Boeing does more than the adapter, the whole nose fairing.

You are forgetting ITAR.   It can't be just any country.

If Energia ends up with a bigger share of the company, it seems likely to me that Sea Launch, if it continues to fly, could end up shedding the Boeing hardware in favor of Russian payload fairings, like those used by the Land Launch Zenit.  Where it will be based, beyond the obvious fact that it would need reasonable access to the equator - probably in the Pacific, is anyone's guess.  Sea Launch was said to be considering a move to Hawaii, for example.

 - Ed Kyle

[kq6ea]

Astrotech doesn't "own" any of the Sea Launch facilities, at least AFAIK. They're a contractor, and always have been. The Port of Long Beach owns the land, and Sea Launch LLC, or one of it's units, owns the buildings.

[Danderman]

1.  It would need a facility like Astrotech no matter where it goes.  The spacecraft are tested, prop loaded and encapsulated in the facility.  So 100k clean room, SCAPE rated facility and room for vertical encapsulation. 

2.  Boeing does more than the adapter, the whole nose fairing.

You are forgetting ITAR.   It can't be just any country.

1) OK, they need an airstrip, a port and a clean room.  I would imagine that RSC Energia could come up with a clean room, I suspect that they have some experience in that area. The only reason that Boeing has Astrotech doing the processing for ITAR purposes. The Russians can't even go inside the Astrotech facility, AFAIK.

2) LandLaunch seems to have a comparable fairing with no Boeing content.

Was ITAR a major factor for LandLaunch? Once the Boeing content is removed, what are the barriers to moving SeaLaunch to, say, Brazil or Indonesia?

[Jim]

1) OK, they need an airstrip, a port and a clean room.  I would imagine that RSC Energia could come up with a clean room, I suspect that they have some experience in that area. The only reason that Boeing has Astrotech doing the processing for ITAR purposes. The Russians can't even go inside the Astrotech facility, AFAIK.

2) LandLaunch seems to have a comparable fairing with no Boeing content.

Was ITAR a major factor for LandLaunch? Once the Boeing content is removed, what are the barriers to moving SeaLaunch to, say, Brazil or Indonesia?

I was referring to ITAR issues with the host country.
More than a clean room is required, prop loading facilities are needed.
Astrotech doesn't do processing, they only provide facilities for spacecraft contractors to work on their own hardware.
Boeing was the one who did the encapsulation work (it was their hardware)

[Danderman]

1) OK, they need an airstrip, a port and a clean room.  I would imagine that RSC Energia could come up with a clean room, I suspect that they have some experience in that area. The only reason that Boeing has Astrotech doing the processing for ITAR purposes. The Russians can't even go inside the Astrotech facility, AFAIK.

2) LandLaunch seems to have a comparable fairing with no Boeing content.

Was ITAR a major factor for LandLaunch? Once the Boeing content is removed, what are the barriers to moving SeaLaunch to, say, Brazil or Indonesia?

I was referring to ITAR issues with the host country.
More than a clean room is required, prop loading facilities are needed.
Astrotech doesn't do processing, they only provide facilities for spacecraft contractors to work on their own hardware.
Boeing was the one who did the encapsulation work (it was their hardware)

Again, a potential model for a revamped SeaLaunch would be LandLaunch, which has, AFAIK, zero Boeing content.

As far as what Astrotech actually did in Long Beach, someone above says that they don't own the facility, Jim claims they don't do the satellite processing, they just let the satellite people use their facilities. I don't understand, then, what it is that Astrotech did at Long Beach.

[Jim]

1.  Again, a potential model for a revamped SeaLaunch would be LandLaunch, which has, AFAIK, zero Boeing content.

2.  As far as what Astrotech actually did in Long Beach, someone above says that they don't own the facility, Jim claims they don't do the satellite processing, they just let the satellite people use their facilities. I don't understand, then, what it is that Astrotech did at Long Beach.

1.  There are other treaties and agreements that would limit Sealaunch basing at certain countries. 

2.  What Astrotech does everywhere, it operates the facilities.  Cleanrooms have to be cleaned, cranes, HVAC, doors have to be maintained,  propellant and fluid systems have to passivated after use, commodities have to be order and stored, forklifts and manlifts have to driven, comm lines and networks have be setup, etc.

[anik]

Energia Overseas Limited Assumes DIP Financing for Sea Launch
http://www.sea-launch.com/news_releases/2010/nr_100504.html

LONG BEACH, Calif., May 4, 2010 – Sea Launch has accepted the terms of agreement for debtor-in-possession (DIP) financing from Energia Overseas Limited (“EOL”). As a result of the court-approved agreement, EOL will replace Sea Launch’s existing DIP lender, Space Launch Services (SLS).

The new DIP financing agreement with EOL, which received interim approval from the U.S. Bankruptcy Court in Delaware on April 27, provides additional funding to Sea Launch, totaling $30 million. Part of the proceeds of this facility will be used to repay all outstanding SLS DIP loans to date, amounting to approximately $19 million. The remaining balance of this facility will be used to fund ongoing operations at Sea Launch through confirmation of its Plan of Reorganization.

The new arrangement is also expected to position Sea Launch for exit financing, as the company prepares for its successful emergence from the Chapter 11 bankruptcy proceedings. The DIP financing transaction closed on April 30. Sea Launch was assisted in the transaction by Jefferies & Company, Alston & Bird LLP and Chris Picone of Buccino & Associates, Inc. EOL was advised by Salans LLP and Avicon (UK).