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Liquidty Bankrupts Sea-Launch

Rocco Fanucci – Tue, 2009 – 06 – 23 14:00
 
 
Well, this doesn't compare to the anomaly from two and a half years ago, but its still significant. Sea-Launch filed for bankruptcy today, via Reuters:
 
Satellite-launch services provider Sea Launch Co and 5 affiliates filed for Chapter 11 bankruptcy protection, citing liquidity concerns and recurring losses from operations.

In a filing on Monday with the U.S. Bankruptcy Court for the District of Delaware, Sea Launch listed assets of up to $500 million and liabilities of more than $1 billion.

The Long Beach, California-based company said in the filing it intends to explore the sale of one or more of its divisions.

Sea Launch, which offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan, is owned by among others Boeing Co (BA.N), Russia's RSC Energia and Norway's Aker ASA (AKER.OL).

The case In re Sea Launch Co LLC et al, U.S. Bankruptcy Court, District of Delaware. No. 09-12153.

 
Oh, the irony. Liquidity problems. From a company that launches Zenit rockets from a converted oil platform.
 
Here's the funny part: they filed just after a Land Launch version of the Zenit rocket delivered a Measat spacecraft to GTO. Citigroup may feel otherwise, having underwritten a $245 million one-year Term Loan last week.
 
Probably won't impact the worldwide launch industry as much as the NSS-8 failure of 2007.
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NSS-8 Launch Anomaly Did Them In

Boeing's on the hook for this one, according to the Chicago Tribune:

Boeing had guaranteed $448 million in loans for Sea Launch, a venture partly owned by Russian, Norwegian and Ukrainian companies that launched rockets from sea as well as from Kazakhstan.

But by seeking Chapter 11 protection, Sea Launch triggered covenants that make the loans immediately due and payable, Boeing said in a Securities and Exchange Commission filing.

"It is Boeing's intention to perform its obligations under its guarantees," Boeing said.

Despite cutting-edge technology that enabled satellite launches close to the equator, Sea Launch struggled to find a working business model in an industry glutted with capacity.

Sea Launch's prospects further dimmed after it became enmeshed in a legal battle with Hughes Network Systems LLC after a rocket blew up on an ocean launch platform on Jan. 30, 2007, bankruptcy filings show.

The accident severely damaged the launch platform, forcing Sea Launch to cancel a Hughes' launch slated for May 2007 and prompting a lengthy dispute between the two companies.

In March, an international arbitrator awarded Hughes $52.3 million in expenses related to the imbroglio, a finding that would have been enforced on Monday had Sea Launch not filed for bankruptcy.

Boeing should be able to offset some of its loss by collecting obligations from other Sea Launch partners. As a result, Boeing said it expects to record a $35 million pretax charge to earnings in the second quarter of 2009. But it warned that the charge could balloon to $478 million if efforts to secure reimbursement failed.
 

Rocco Fanucci – Fri, 2009 – 06 – 26 21:59