Ovzon AB has been informed by Maxar that there will be additional delays in the finalization of the Ovzon 3 satellite.
To accommodate an updated launch window, Ovzon has also shifted launch provider to SpaceX, with liftoff on a Falcon 9 rocket and a target date between July and September of 2023.
Due to the delays in the production of the Ovzon 3 satellite, the company has been engaged with the current launch provider Arianespace to find a new launch opportunity, which Arianespace ultimately could not accommodate. Accordingly, Ovzon has finalized an agreement with SpaceX to ensure flexibility and the most optimal timing to launch the satellite when it is ready for liftoff. Ovzon 3 will be launched by a flight-proven Falcon 9 rocket later this year from Cape Canaveral, Florida.
The delay of Ovzon 3 is expected to increase the total cost of the satellite project with approximately $25 million. The delay will have no effect on Ovzon’s current business commitments. The company has secured access to strategic satellite capacity that ensures ongoing service delivery and future sales of Ovzon’s industry leading SATCOM-as-a-Service. In addition, Ovzon has secured additional financing (read below).
“While we are clearly disappointed in the continued delays in production of the satellite, we remain perfectly confident with the market demand of Ovzon 3, evidenced by the increasing demand from current and new customers around the world. The underlying capability and technology will be the catalyst for a paradigm shift in mobility, performance, and resiliency in delivering Ovzon’s SATCOM-as-a-Service. We are working relentlessly with Maxar, SpaceX and other stakeholders to finalize the satellite and launch Ovzon 3 into orbit at first available opportunity,” said Per Norén, CEO of Ovzon.
Ovzon AB has secured additional financing, to finalize and launch the Ovzon 3 satellite, by increasing the current loan facility with P Capital Partners from $60 to $65 million and through confirmed interest from several major shareholders, including Öresund, Bure, Handelsbanken Fonder, Fourth AP-fund and AFA Försäkring, to subscribe for SEK 200 million in an equity issue.
Due to the delay in the Ovzon 3 satellite build, the company estimates an increased cost of the project with approximately $25 million. The company expects to provide more information on the new share issue in the near term and has appointed Carnegie Investment Bank as financial advisor.
The loan from P Capital Partners is denominated in USD, the remaining tenor for the facility is approximately three years (expires December 31, 2025) with an interest rate of $3M LIBOR (London Inter-Bank Offered Rate) + 10%. The loan terms include regular covenants and undertakings with one explicit condition for the facility being that Ovzon conducts a capital raise through equity before the end of May 2023. With $45 million already being drawn from the facility, the amended agreement means that an additional $20 million may be drawn, if needed.
“We are proud to have strong commitment and long-term support by our shareholders and pleased to continue our excellent collaboration with P Capital Partners, to enable the company to deliver on the promise of finalizing and launching Ovzon’s unique first own satellite – Ovzon 3“, said Per Norén, CEO of Ovzon.
