Spacecom Seeks to Recover $50m From SpaceX (TSLA, FB)

Israel-based Spacecom plans to sue its satellite manufacturer, Israel Aerospace Industries (IAI), and Elon Musk’s SpaceX, after its Amos-6 satellite exploded along with a Falcon 9 rocket at SpaceX’s launch site in Florida last Thursday.

The company is claiming a compensation of $205 million from IAI and $50 million or a free flight from SpaceX. Spacecom’s intention to sue was first reported by Jerusalem Online in a story that also mentioned that the company is looking to purchase another satellite to replace Amos-6. (See also: SpaceX Rocket Explodes During Test.)

Amos-6 was supposed to be leased to Eutelsat Communications and Facebook (FB) to expand internet access in sub-Saharan Africa. The company said that it expected its equity to plunge by about $30 million in the aftermath of the incident. (See also: Facebook To Launch Satellite in Sub-Saharan Africa.)

According to another report published by Reuters, Spacecom said it is due a full refund from Amos-6’s manufacturer with interest of LIBOR plus 4%. The company also wants the premium it paid for insuring the satellite. Spacecom said it will use the money to pay off its bondholders to whom it owes $232 million.

SpaceX has not offered any comment. Musk’s SpaceX, which has missions worth more than $10 billion lined up, is expected to shift its launch site to another base in Florida.

Spacecom Shares Tumbling

Since news of the explosion hit the markets on Thursday, Spacecom shares have tumbled by more than 35%. This comes after most of its customers, including Facebook and Eutelsat, canceled their agreements with the company. David Pollack, Space Com CEO, said during a conference call on Sunday, “As a result of the loss of Amos-6, our service agreements with Facebook Inc. and Eutelsat Communications were canceled. We are actively seeking alternative options for satellite providers following the loss, including building a new satellite, which may take an estimated 24 months.”

In addition to this, the company’s planned merger with China-based Xinwei Technology Group will possibly get canceled.The deal, worth $285 million, was contingent on the successful launch of the Amos-6 satellite .

The company said in a statement, “[It has] updated the acquirer (Xinwei) about the loss of the satellite and is examining, along with the buyer, the possibility to amend the agreement and adjust to the new situation.”



from Department of Private Space Inc.