NewSat slumps after talks with financiers

NewSat (NWT) shares are lower in morning trade after the satellite operator responded to an ASX price query, blaming the selling on alleged breaches of its financing facility and negative media commentary about the company. 

At 12.31pm (AEST), NewSat was 10% lower at $18.50, its lowest in almost four years, against a benchmark index fall of 1.4%.

NewSat shares closed at 26c on Wednesday, then fell steeply, prompting a query from the market operator.

NewSat noted an article in Eureka Report on Wednesday that contained "negative commentary on the company, its corporate governance, capital structure and earnings expectations".

"The company disagrees with the commentary but considers that the negative sentiment in the article has led to selling in the market," NewSat said. 

The group also noted its discussions with the financiers of its Jabiru-1 satellite construction project about a waiver for "certain alleged technical or documentary breaches of the financing facilities".

NewSat said it was in the process of agreeing details for a formal waiver of the breaches, which would allow for the project to be funded out of cash reserves and for debt funding of the project to recommence.

The group said it had made all required payments to its financiers.

NewSat said although the discussions are incomplete, it expects the waiver will contain requirements for additional equity funding, the appointment of new independent directors and a new chief financial officer, and other corporate governance matters.

The firm said it did not expect its full-year earnings to differ materially from previous guidance given in June, when the company lost three directors. Singapore-based Ching Chiat Kwong has emerged as the largest shareholder.