Australia looks like becoming a significant world player in the satellite industry. But we are going to achieve that milestone despite the lack of support from our local institutions. And our politicians are no better despite their rhetoric.
During the week I was yarning to NewSat CEO Adrian Ballintine about what he had to do to fund the $600 million satellite launch now locked in for 2015. He went to the local banks but was shown the door.
Standard Chartered in Hong Kong became NewSat’s banker.
He went to the local institutions for equity and, for the most part, was again shown the door. The world’s largest investor Capital became his major equity supporter and that brought in other world players. Finally some smaller local institutions also took equity in the recent $100 million capital raising.
In terms of customers, the Australian defence people use China for satellite communications. However the US defence operations and global telecommunication operations have been major supporters of the Australian satellite industry and were important contributors to the $680 million forward orders that NewSat signed up to get started.
Then this week our innovations minister Kate Lundy decided to launch an Australian space utilisation policy. In her prepared statement there was no mention that we are going to become a player in satellites although there was a brief mention of it in off-the-cuff remarks. So someone in Canberra has heard a whisper that a new industry is being started.
The biggest supporters of the Australian satellite launch are the US and French export banks because the Australian satellite manufacture and launch will create substantial employment in the US and France. But it will create Australia employment as well. The detailed work the French and US export-import banks did on the Australian project was the key reason NewSat with such a small market capitalisation (about $250 million after the issue) was able to get equity backing for a $600million project.
And in Australia very few bankers, analysts or politicians understand the space/satellite business whereas in the US they know how important it is to global communications.
NewSat has covered its Jabiru-1 launch costs with its existing sales. A large part of the remaining $3 billion in Jabiru-1 satellite capacity is set to be profit. And when it fills in Jabiru-1 NewSat has a series of other satellite spots.
In the attached video Ballintine explains how such a small company raised $600 million despite the locals.