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GeoEye Seeks Operating Capital After Paying GeoEye-2 Debts

By | October 4, 2010

      [Satellite TODAY Insider 10-02-10] Satellite and aerial-based geospatial services provider GeoEye is continuing with its financing push by offering another $125 million of its senior secured notes, which are due in 2016, the company announced Oct. 1.
          GeoEye intends to use the net proceeds of its most recent offering, set to expire Oct. 8, for general corporate purposes, which may include working capital, future production and services expansion, contingent capital expenditures and other strategic opportunities. GeoEye will use its assets and some of its subsidiaries to secure the offer on a second-priority basis.
          In September 2009, GeoEye received $249.5 million in funding as a result of a 2012 senior note sale. After completing the sale, GeoEye said it had acquired 99.8 percent of the funding needed to tackle its 2012 debt but still needed to find investors to cover the costs of constructing the GeoEye-2 high-resolution satellite, scheduled to launch in 2012 and be operational in 2013.
          GeoEye selected Lockheed Martin Space Systems to build the GeoEye-2 spacecraft in March. While financial terms of the satellite contract were not disclosed, GeoEye announced March 10 that it signed a commitment letter to sell a 15 percent stake in the company to Cerberus Satellite, which would generate $112.1 million on gross proceeds and meet a requirement for its bid on the U.S. National Geospatial-Intelligence Agency’s (NGA) EnhancedView program. GeoEye won the $3.5 billion award in August.
          Following GeoEye’s EnhancedView award, Cerberus completed its 80,000-share GeoEye stock purchase on Sept. 23 for $78 million. GeoEye said it would also use that money to develop and launch GeoEye-2.
          The NGA also is contributing up to $336.9 million toward the overall construction costs of the GeoEye-2 satellite. The EnhancedView award includes $2.8 billion for commercial satellite imagery purchases by the NGA over the next 10 years under the terms of a service level agreement from GeoEye’s satellite constellation.

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