Daily Management Review

$50 Million of Free Flight Demanded from SapceX by Satellite Owner after Florida Blast


09/05/2016




$50 Million of Free Flight Demanded from SapceX by Satellite Owner after Florida Blast
After a Spacecom communications satellite was destroyed last week by an explosion at SpaceX's Florida launch site, Israel's Space Communication Ltd said on Sunday it could seek $50 million or a free flight from Elon Musk's SpaceX.
 
Spacecom also could collect $205 million from Israel Aerospace Industries, which built the AMOS-6 satellite, officials of the Israeli company said in a conference call with reporters.
 
It does not disclose contract or insurance terms, SpaceX reportedly said in an email to Reuters. what insurance it had for the rocket or to cover launch pad damages beyond what was required by the Federal Aviation Administration for liability and damage to government property was not made by the company which is not public. The FAA oversees commercial U.S. launches in the US.
 
Worth more than $10 billion, SpaceX has more than 70 missions on its manifest for commercial and government customers.
 
Musks heads three major transportation and energy enterprises and the space launch company is one of them. He heads electric car maker Tesla Motors Inc and SolarCity Corp, both of which are loss making companies and has put Musk in challenge.
 
Thursday explosion destroyed the SpaceX Falcon 9 rocket and its payload and Spacecom has been hit hard in the aftermath. With its equity expected to decline by $30 million to $123 million, the loss of the satellite would have a significant impact, the Israeli company said.
 
With the explosion occurring late in the last trading day of the week, Spacecom shares dropped 9 percent on Thursday and the stock plummeted another 34 percent when trading resumed.
 
It was too early to say if the company’s planned merger with Beijing Xinwei Technology Group would proceed, Spacecom's general counsel Gil Lotan said in a conference call with reporters.
 
Saying that a deal was contingent on the successful launch and operation of Spacecom's AMOS-6 satellite, Xinwei last month agreed to buy Spacecom for $285 million.
 
"We hope to continue fruitful communications with the prospective buyer," Lotan said.
 
Comments on whether the incident would impact the terms of the deal were declined by Xinwei officials on Monday.

How the incident would impact the merger was being discussed in close communication with Spacecom, the firm said in a statement on Friday. The company’s broader strategy to establish an integrated space information network would not be impacted by the accident, it added.
 
Facebook and Eutelsat Communications had leased the AMOS-6 satellite’s broadband services to expand internet access in Africa and were among others to use the satellite services. The companies said in separate statements after Thursday's accident that both the firms are pursuing other options.
 
While how much damage the explosion caused at SpaceX's primary launch site at Cape Canaveral Air Force Station in Florida has not been made clear by neither SpaceX, nor the FAA which is overseeing the investigation, the cause of the accident is still under investigation.
 
A second launch site in Florida, which was last used to launch NASA's space shuttles and which is nearing completion, would be the location for future flights, SpaceX said on Friday.
 
(Source:www,reuters.com) 






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