I missed the call this morning and will review hopefully a recording that is released. But based on what is actually in the Report then nothing has changed re Spacelink Funding from what I can gather:
Funding discussions are progressing with debt and equity financiers and these remain on track for an
initial funding announcement in Q3 2021. The funding is being constructed to maximise EOS
shareholder value in the context of the extensive SpaceLink engagement with US capital markets.
Debt funding of up to US$250 million is planned for 2023, for which discussions with export credit
agencies and major banks have commenced.
Did BG say today that Spacelink funding is now off table and no one is coming in? If EOS want to borrrow to fund a higher equity % of the project then so be it. They are clear that Q3 they will award the satellite contract and start building. Is this not confidence of customer commitments? And on this, if you get the customer, and the revenue, then debt and equity will follow as night follows days.
So it all comes down to customer commitments...
The SpaceLink sales pipeline is more than US$200 million per annum on a risked basis (more than
US$1.2 billion per annum on an un-risked basis). Negotiations with prospective customers will
intensify as soon as the satellite contract is executed. From this point SpaceLink customers will have
certainty regarding service schedules and data capacity.
Reading the comments above you would think Spacelink is dead.
The future of the company is in the short term tied up in Spacelink. I dont think it should be a surprise that EBIT is being reduced by Spacelink costs which the company expenses straight to the bottom line. Or that Covid is impacting operating margin. The company has reiterated again its expectation of material contract wins over the next six months across all lines of business, and BG has been consistent that the company is INVESTING for growth and so short term impact on EBIT to take this company to the $1bn revenue mark. You cant do this without investing for growth- this isnt an industrial stock.
The next six months will define BGs legacy. Im still a backer at this stage and believe in the companys products and technology suite, across a multitude of horiztonal business lines. Market doesnt like risk, its doesnt like uncertainty. All we can do is trust our judgement on whether this management can execute and its all a personal choice and so good luck to all.
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