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Kleos Space secures $5.5m to drive satellite roll-out

Stephen Kuper

ASX-listed Kleos Space has secured a $5.5 million loan agreement with Dubai-based family office Winance to support the company’s commercialisation plans. 

Kleos Space secures $5.5m to drive satellite roll-out
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The loan agreement ensures Kleos is well-funded to execute its commercialisation plans while awaiting revenues from early adopter contracts. The Loan Agreement is for 12 months, or later if agreed by both parties. Interest is 1.5 per cent per month, payable monthly.

Alternatively, Kleos may elect to issue CDIs in payment of the interest, in which case the interest rate will be 2.0 per cent, per month (the CDIs will be issued at the average VWAP of CDIs over the three trading days (inclusive) on which trades are recorded prior to the issue date).

Drawdown on the loan agreement is conditional upon, among other things, Kleos and Winance entering into a warrant deed under which Kleos will issue to Winance warrants over CDIs.

Chief executive of Kleos Space Andy Bowyer said, "This funding provides Kleos with working capital to progress the development of our second cluster of satellites while we await revenues from our Scouting Mission satellites."

Kleos will use the funds to progress the development and launch of its second cluster of satellites, increase its international business development presence within the defence and security sector and repay existing convertible notes issued on 12 September 2019 and 20 December 2019.

Kleos will generate revenues after the launch of its Scouting Mission satellites from Chennai, India (see ASX release 12 February 2020).

This initial satellite cluster is the foundation of a larger constellation that will geolocate radio frequency transmissions to provide global activity-based intelligence irrespective of the presence of positioning systems, unclear imagery and targets are out of patrol range.

"Luxembourg has a successful economic partnership with the UAE, developed over the past 20 years. This collaboration provides Luxembourg-based organisations operating in the space sector, such as Kleos Space, with access to investment and financing opportunities," Bowyer added.

Director and chief financial officer of Winance, Waqas Ibrahim, said, "We are pleased to collaborate with Kleos Management by providing a funding commitment that will enable them to expedite their operations especially as the company prepares to launch its first of many satellites.

"This new partnership is in line with Winance’s vision of investing in proficient and progressive thinking management teams. We are convinced that this collaboration can serve as a springboard for both our companies in the GCC, Australian and Luxembourg markets. Kleos technology has never been more relevant than today in addressing a real world need and has attracted interest from governments and private organisations."

Marc Serres, CEO of the Luxembourg Space Agency, reinforced the previous statements: "Luxembourg and the UAE share the same commitment to support the economic development of the commercial space industry.

"The agreement between a Luxembourg-based company and a Dubai family office shows that our bilateral cooperation with the UAE is successful when it comes to developing high technology space products and services through financing instruments tailored to meet the needs of private companies."

Kleos Space is a space enabled, activity-based intelligence, data-as-a-service company based in Luxembourg. Kleos Space aims to guard borders, protect assets and save lives by delivering global activity-based intelligence and geolocation as a service.

The first Kleos Space satellite system, known as Kleos Scouting Mission (KSM), will deliver commercially available data and perform as a technology demonstration. KSM will be the keystone for a later global high capacity constellation.

The Scouting Mission will deliver targeted daily services with the full constellation delivering near-real-time global observation.

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