Australian pure-play satellite communications company NewSat has been placed in administration following financing woes that threaten to grind its Jabiru-1 satellite project to a halt.
Shareholders of the company, which is listed publicly on the Australian Securities Exchange (ASX), were told on Friday that PPB Advisory had been appointed as its administrator, while McGrathNicol had been appointed its receiver.
The receivers and administrators have also been handed control of the assets of NewSat's subsidiaries, including Jabiru Satellite Holdings, NewSat Space Resources, and NewSat Networks.
NewSat's administration comes after it entered a trading halt on March 26, announcing that it is in ongoing negotiations with lenders in the US in a bid to recommence financing for its AU$611 million Jabiru-1 satellite project.
Jabiru-1 has been touted by NewSat as Australia's first commercial Ka-band satellite, which, if successfully completed, would see it become the only Australian-owned commercial satellite in operation.
The company's Jabiru satellite program saw the launch of its Jabiru-2 Ku-band satellite aboard MEASAT Satellite Systems' MEASAT-3b satellite launch last September, with another three planned satellite projects, not including Jabiru-1 -- which is being built in the US by Lockheed Martin.
Shareholders were told that the company would continue operating as usual under the administrators' control, while the capital raising needed to pay Lockheed Martin and French satellite launch provider Arianespace for their services would be progressed.
"The receivers' immediate priority is to take control of the assets of NewSat, urgently assess its financial position, and progress the capital-raising activities recently commenced by the company," said joint receiver Jason Preston of McGrathNicol in an ASX-issued statement (PDF). "In the interim, the operations of NewSat will continue on a business as usual basis.
McGrathNicol said that an emergency motion for a temporary restraining order and a preliminary injunction have been granted temporarily under the Chapter 15 of the Bankruptcy Code in the US in a bid to keep its contracts going with Lockheed Martin and Arianespace -- both of which issued payment default notices earlier this year.
Less than two weeks after NewSat entered a trading halt, the company said that it would need to raise at least AU$70 million during the third quarter of 2015 in order for lenders to continue financing the Jabiru-1 project.
In April, the company revealed that as part of negotiations, one of its lenders, COFACE Lender Group, decided to withdraw further funding of the project.
In August last year, the company told investors that it required additional capital, representing approximately 6 percent of the total project, despite CEO Adrian Ballintine reassuring the market in 2013 that the company had secured all AU$611 million it required for the Jabiru-1 satellite launch.