Krunichev Buys ILS

[Satellite Today – 5-29-08] Khrunichev State Research and Production Space Center has acquired a majority interest in International Launch Services (ILS), the two companies announced May 29. In a stunning piece of news in the launch services industry, Khrunichev acquired the shares of ILS owned by majority shareholder, Space Transport Inc. Financial details of the deal not disclosed. The transaction was completed today. ILS will remain a U.S. company, incorporated in Delaware, and subject to U.S. regulations.
    Frank McKenna, ILS CEO, was keen to emphasize that the deal would see “no change” in the operations and management of the company. He said in a statement, “We have an outstanding relationship with Khrunichev delivering commercial Proton launch services for our customers over the past 15 years. For ILS employees and customers, there will be no change in operations or management and we will continue our focus on performance. The completion of this transaction only strengthens the relationship with our launch partner, Khrunichev.”
    ILS holds the exclusive worldwide rights to market and sell commercial launch services on the Proton launch vehicle, built by Khrunichev, as well as the Angara vehicle under development.
    However, the deal comes on the back of two recent launch failures for ILS and the Proton Breeze M launch vehicle, which has put the two organizations on the back foot in an increasingly competitive launch services industry. The latest launch failure took place in March this year when ILS failed to successfully launch the AMC-14 satellite for SES Americom. In September last year, the Proton launch vehicle also failed to put the JCSAT-11 satellite into orbit for Japanese satellite operator, JSAT.
    In April this year, the two companies initiated a quality initiative for Khrunichev and its subcontractors to assure future Proton customers that their satellites will reach orbit. McKenna recently told Satellite News, “Both Khrunichev and ILS realized that steps needed to be taken. The Khrunichev quality initiative is intended to restore customer confidence that Proton is a reliable product for the long run.”

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