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... ASX Release.. 1 November 2013

...CLARIFICATION AROUND RECENT SHARE ISSUE...

NewSat Limited (ASX: NWT) ("NewSat" or "Company") would like to clarify the circumstances around an issue of shares announced on 29 October 2013. The relevant Appendix 3B announced the issue of 17,000,000 new shares at an issue price of $0.3716 per share.

As previously announced, NewSat has successfully finalised approximately US$611 million in funding commitments to fund its Jabiru-1 satellite project.
In late February and early March 2013, the Company completed a placement of equity and mezzanine funding for approximately US$135 million and subsequently, in July 2013, it signed definitive credit agreements for US$399 million of debt financing from US Ex-Im Bank and COFACE ("ECA Facilities").

In the final stages of negotiating the definitive agreements for the ECA Facilities in late June 2013, NewSat was advised by COFACE that, despite the fact that it had issued a binding Promisse de Guarantee, one of its co-underwriters was withdrawing and that NewSat would need to cover the shortfall created. After further negotiations with US Ex-Im Bank, the shortfall faced by NewSat for its Jabiru-1 funding requirements was approximately US$2.6 million (approximately A$2.9 million).

In order to cover this shortfall in a narrow timeframe to avoid potentially lengthy delays and increased project costs, the Company considered various offers of mezzanine finance in preference to a conventional equity raising.
On 3 July 2013, the Company entered into an unsecured, short-term, fixed-rate cash advance facility with Orbital Capital GP Limited ("Orbital") for the provision of A$5 million ("Orbital Facility"). Orbital previously provided bridging finance to NewSat in 2012.

The Orbital Facility covered the US$2.6 million shortfall in the ECA Facilities with the balance available for working capital and to cover legal and other costs incurred by NewSat in finalising the ECA Facilities. The Orbital Facility was provided for a term of 180 days from the date of the first drawdown with a fixed interest component of A$1.4 million payable at the end of the term. The funds were placed into a trust account, available to be drawn down at the same time as funds under the ECA Facilities.

On 29 October 2013, Orbital agreed to waive any conditions precedent with respect to the drawdown of the funds and the Company and Orbital agreed to an early retirement of the Orbital Facility, with Orbital electing to be repaid the principal and interest components of the Orbital Facility in NewSat shares.

In accordance with the terms of the Orbital Facility, the repayment by way of share issue was to be conducted at an issue price of 75% of the VWAP for the 15 trading days immediately prior to the date on which Orbital provided a placement notice to the Company, which was $0.3716.
As a result, 17,000,000 shares were issued on 29 October 2013 and a further 220,648 shares will be issued on or around 5 November 2013 ("Orbital Shares").
The Orbital Shares were and will be issued pursuant to the Company's placement capacity under Listing Rule 7.1A.

Orbital does not require a disclosure document or prospectus to be issued by the Company in respect of the issue of the Orbital Shares. As a result, the Orbital Shares were and will be issued without disclosure under Part 6D.2 of the Corporations Act.
Further, the Company is unable to lodge a ‘cleansing notice’ under section 708A(5)(e) of the Corporations Act as the Company's shares have been suspended for more than five days during the last 12 months. Accordingly, on 4 November 2013, NewSat will issue a Prospectus to remove any secondary sale restrictions and facilitate future secondary trading of the Orbital Shares in accordance with section 708A(11)(b)(i) of the Corporations Act.

NewSat is currently in the final stages of satisfying outstanding conditions precedent to draw down on the ECA Facilities.
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