PARIS — Startup satellite IoT/M2M service provider Sky and Space Global (SAS), as part of a broad restructuring of its business plans, has signed an MoU with Europe’s Arianespace to launch 88 satellites on Europe’s Vega rocket starting in 2020.
The two parties have agreed that the contract must be confirmed by July 1.
SAS has also signed a preliminary agreement with Rocket Lab to explore whether that company’s Electron rocket can perform an SAS launch before the end of this year.
U.K.-based, Australia Securities Exchange (ASX)-traded SAS has had liquidity issues that have caused the construction of its 200-satellite constellation to fall behind schedule at manufacturer GomSpace of Denmark.
The two companies have agreed to revamp their existing contract, which likely will mean SAS will not be launching satellites before 2020. The company had scheduled launched with Virgin Orbit, whose inaugural flight has been delayed to an uncertain date late this year.
GomSpace and SAS agreed that their expanded and restructured relations would be confirmed by mid-May. If the two companies come to an agreement on schedule and pricing, GomSpace would continue building SAS’s Pearls satellite, to operate in equatorial orbit, and also start work on a smaller constellation of 6u satellites to broaden SAS’s footprint.
SAS said in a statement to investors April 9 that it had received encouragements from 16 existing customers that indicated they would increase the value of their service contracts with SAS if broader coverage were offered.
SAS said it expected that what it labeled its Global Coverage constellation would number either eight or 16 satellites and cost between 4 million euros and 7 million euros, assuming GomSpace is the manufacturer.
To begin work, GomSpace has insisted that SAS make an immediate payment of 550,000 euros.
For their existing contract for the supply of Pearls satellites, GomSpace and SAS still have to agree on a new delivery schedule and total cost. SAS estimated the contract’s value at between 48 million euros and 70 million euros. Here too, GomSpace is insisting on advance payments and guarantee of future payments.
SAS said this agreement must be concluded within 30 days under the agreement with GomSpace.
“It is likely that SAS will not be able to execute its operating strategy within the timeframe currently planned unless a suitable alternate satellite manufacturer is engaged,” SAS said.
SAS said that has part of its plan to conserve cash, it had cut its annual operating expenses by some 1.4 million Australian dollars per year, equivalent to 12%.
The company said it is in negotiations on a U.S. debt facility to cover launch costs, but it’s not clear how this facility could be applied to an Arianespace launch.