Ovzon and SSC close to sealing satellite communication contract worth $10M

Ovzon and SSC close to sealing satellite communication contract worth $10M
by Staff Writers
Stockholm, Sweden (SPX) Nov 27, 2023

Ovzon AB, a leading provider of satellite communication services, is currently in the final stages of negotiations with the Swedish Space Corporation (SSC) for a significant order. This potential deal, estimated at approximately 10 million USD, involves the provision of SATCOM-as-a-Service, including Ovzon's innovative mobile satellite terminals, with a projected delivery timeline in 2024.

The company made this announcement in light of its assessment that these negotiations are approaching a conclusive phase and anticipates that a binding agreement will be finalized soon. However, Ovzon emphasizes that the finalization of a binding agreement is not guaranteed before the commencement of its upcoming rights issue's subscription period, starting on November 22, 2023.

This order, centered on Ovzon's SATCOM-as-a-Service, highlights the company's expertise in delivering end-to-end satellite communication solutions. The service package is expected to include Ovzon On-The-Pause and Ovzon On-The-Move terminals, reflecting the company's commitment to providing versatile and mobile communication capabilities, particularly beneficial in remote or demanding operational environments.

Ovzon's decision to proceed with a new share issue, with preferential rights for its existing shareholders amounting to roughly SEK 250 million (the "Rights Issue"), was taken by its Board of Directors on October 20, 2023, and received approval in an Extraordinary General Meeting held on November 15, 2023. The subscription period for this Rights Issue is slated to run from November 22 to December 6, 2023.

The company's policy typically involves making public announcements about received orders only when a binding agreement is in place. However, given the advanced stage of negotiations with SSC and considering the timing of the imminent Rights Issue, Ovzon has decided to deviate from this norm. This approach is justified by the potential impact of the order on existing shareholders and prospective investors in the Rights Issue.

Despite this forward-looking announcement, Ovzon cautions that the receipt of the order before the start of the Rights Issue subscription period remains uncertain. The inherent risks in business negotiations, including possible interruptions, might impact the finalization of the order.