IPO Watch: Space eavesdropper Kleos launches $11m prospectus ahead of ASX listing
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Spy satellite operator Kleos Space has finally released its prospectus to raise $11 million in an Initial Public Offering ahead of a mid-year ASX listing.
The Luxembourg-based space eavesdropper Kleos will commission Danish nanosat specialist GomSpace, to build miniature satellites.
It plans to use them to locate mobile phone, satphone, and maritime radio signals and those from “ships of undesirable users such as drugs and people smugglers, terrorists, pirates, illegal fishermen and those in need of search and rescue”.
The prospectus is open from June 7 to June 21. The stock plans to list on July 9.
It’s a busy time for ASX listings with at least 11 companies joining the local bourse in June.
Kleos is raising money at 20c a share which will largely go towards marketing, R&D and building and launching its satellites.
Chairman Peter Round says Kleos “will have the potential to analyse information from almost any radio transmission on Earth; knowing where it was transmitted from and when it was transmitted.
“We will be able to tell where the transmitter is without reference to GPS… We can then combine this knowledge with other information [such as] weather, road networks, maps, shipping lanes and airways.”
Initially Kleos will operate a single “scouting” satellite — due to launch mid-2019 — that will “revisit each part of the Earth every day”.
Later the group hopes to launch a constellation of 20 satellites to offer continuous worldwide coverage.
In its prospectus, Kleos noted one of the business risks is that it would buy the ‘Scouting Satellite’ from nanosatellite maker GomSpace rather than make their own, and any delays “may have a materially adverse effect on Kleos’s business, financial performance and reputation”.
Kleos plans to sell the data it collects to government and intelligence agencies, and businesses interested in locating threats, assets, or emergency beacons.
Kleos reckons the “Intelligence Surveillance and Reconnaissance” market will grow from $US41.5 billion in 2015 to $US53.3 billion by 2020.
That includes a $500 million commitment from the Australian federal government to improve Australia’s space-based surveillance capabilities to support defence operations.
Kleos believes space-based surveillance is superior and more efficient than airborne-based systems commonly used today.
Kleos is yet to obtain a concession from the Luxembourg government to use the local satellite system or a licence to use radio frequencies to transmit and receive data on its network.
Kleos was last year spun out of Magna Parva, a company which held the intellectual property Kleos is using — and is owned by chief Andrew Bowyer and technology boss Miles Ashcroft.
Magna will receive 23.46 million shares — worth $4.7 million at the offer price.
Kleos has to pay a 5 per cent royalty to Magna on any profits for three years from January 2018, and 2.5 per cent from 2021 to 2030.
The company has, in its short life, so far made a total of €249,000, all of which came from government grants.
Corporate advisor Hunter Capital will receive a total of $2.4 million, with $1.6 million being paid out in shares and options escrowed for two years.