PARIS — Cubesat manufacturer GomSpace and its biggest customer, Sky and Space Global, have reached an in-principle agreement on restructuring the contract to build Sky and Space’s IoT/M2M constellation and then adding a new contract for a separate constellation.
The so-called “heads of agreement” includes no committed delivery schedule or even cost and appears to be an effort to put the two companies’ difficult relations back on firm footing.
Britain-based, Australia (ASX)-traded Sky and Space Global in 2018 fell behind in its payments to GomSpace for the initial constellation, forcing GomSpace to slow work.
Sky and Space recently raised additional funds to minimize the delay, but whether these are sufficient to bring the first-generation constellation to completion is unclear.
ASX trading in Sky and Space stock was suspended on April 4, at the company’s request, pending what it called the announcement of “a key supplier agreement and material business update.”
GomSpace told its investors April 8 that the two companies had agreed to reassemble their relationship to assured continued work on the original constellation while starting additional satellites.
The ‘heads of agreement’ is vague on almost every point
But contract details for both have not yet been settled.
“The technical specifications, statement of work, delivery schedule and the commercial, payment and legal terms to be financial decided in a definite agreement expected to be entered no later than May 2019,” GomSpace said in a statement.
The manufacturer said what the new deal would include advance payments by Sky and Space and “security for payments.”
There will be no work on the new constellation until the initial contract’s new terms have been definitively settled, the company said.
GomSpace and Sky and Space Global in 2017 signed a contract to build Sky and Space’s constellation. The deal was modified later in the year. Sky and Space has booked launches with
GomSpace said the total contract value is about 64.5 million euros ($73.8 million), excluding options. Sky and Space has made payments totaling 7.2 million euros as of April 8, an amount covering development through the critical design review of the platform and work on its communications payload.
Sky and Space Global had expected to launch 16 of its 200 satellites by mid-2019 using Virgin Orbit as launch provider. Virgin Orbit still has not performed an inaugural orbital flight and in any event it’s unclear whether the first 16 satellites would be deliverable this year by GomSpace given the work stoppage last year.
The amended agreement is valued at between 48 million and 70 million euros, depending on the satellite models Sky and Space selects.
GomSpace and Sky and Space Global have entered into a “Heads of Agreement”