From Communications Day today -
Future Sky and Space Global plans indoubt following Australian director exits
ASX-listed nanosatellite provider Sky and Space is teetering on the brink of survivalfollowing the departure last week of Australian directors Michael Malone and Di Fulton and its plans to completely change its business model. In a supplementary prospectus lodged with the Australian Securities and Investments Commission yesterday, the company advised that it is not in compliance withthe requirement that a public company must have at least two of its directors living inAustralia. It said it is likely that it will not be reinstated to trading until new boardmembers are appointed.
However, that issue is overshadowed by the revelation that it only has sufϐicientcapital to fund its ongoing operations for approximately two months.
If the current capital raising is short or the company can't renegotiate a new dealwith its satellite manufacturer, it warned investors that the ϐinancial viability of thecompany was at risk.
As revealed in CommsDay last week, the board resignations of both Malone and Fulton were announced at the same time as a major shift in the original Sky and SpaceGlobal plan, which was aiming to provide coverage to equatorial regions of the globe. Itwill now provide global coverage and enter new markets – Australia, Russia, China,South Africa, Argentina, Canada – in a bid to fast-track revenue growth.
The capital raising was announced in February, with iiNet founder Malone at thetime pledging to invest $400,000 in the company as part of a $15 million raise. However, that investment as well as other proposed funding could be in jeopardy – under thenew prospectus the company has given previously committed investors withdrawalrights in view of the various changes.
The company is also in negotiations with satellite manufacturer GomSpace on newnanosatellites to achieve the changed business plans. However, it has also advised thatshould new deϐinitive agreements not be ϐinalised, it is likely that the company will notbe able to execute its operating strategy within the timeframe as currently planned unless a suitable alternate satellite manufacturer is engaged.
Sky and Space also advised investors that the underwriting agreements that weremade and detailed in the original prospectus have been terminated. The agreementswere with Taylor Collison and Chieftain Securities, with Taylor Collison originally having agreed to underwrite the priority offer up to $2,800,000 and Chieftain Securitiesagreeing to underwrite the priority offer up to $200,000.
However, Taylor Collison will continue to act as the lead manager to the placement.The company has given potential investors until 16 May to formally withdraw shareapplications under the new prospectus.
