At time of writing, the share price of Sky and Space Global Ltd [ASX:SAS] is stagnant, as they are under a voluntary suspension.
Prior to the suspension, the Sky and Space share price has been locked in a slide:
The latest news out of the company is that two board members have resigned and an update has been provided on its debt financing and operating expenditure.
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Two board members out, debt financing progressing and operating expenditure cut
As per the announcement:
‘Having supported the Company over the past few months as it progressed its operating plan, and with a changed operating strategy and business plan now in place, Michael Malone and Di Fulton have tendered their resignations from the Board.’
In another announcement Sky and Space went on to state that delivery of the first batch of eight nanosatellites would be made by the end of 2019.
This has in turn pushed back launch plans to early 2020, with a Memorandum of Understanding (MoU) in place with Arianespace to negotiate the launch of up to 88 nanosatellites using Arianespace Vega launchers operated from the Guiana Space Centre.
As for debt financing and operating expenditure, the company provided the following update:
‘Negotiations with US debt financing for launch are progressing, with a term sheet being finalised. In addition, the Company has made notable progress to reduce its operating expenditure by more than 12%, as previously planned. This equates to a $1.4 million AUD reduction in annualised operating expenditure.’
Long-term shareholders may well be perturbed by the launch date being pushed back and eager to hear the terms of the debt financing, as well as learn the identities of the new board members.
The company will come out of its voluntary suspension on 18 April, when it makes an announcement.
What does the future hold for Sky and Space?
The launch date being pushed back is certainly a setback for the company, and investors will want to see tangible progress being made towards this goal in the coming months.
Securing a MoU for the launch is a necessary first step, but more detail about debt financing will be desired.
As of its half-yearly report, it has slightly over $1.4 million in cash and cash equivalents on hand.
With limited funds, it is possible that the next few months will see the company engage in capital raising.
That being said, the company’s project is an exciting one and has the potential to transform telecommunications in remote areas and developing countries.
How it gets there is another question. If you are a long-term shareholder it is possible that further pain is in the offing before you see a return.
For Money Morning
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