Jetpack maker stays airborne with $9m loan following write-down
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Jetpack maker Martin Aircraft has secured a NZ$10 million loan ($9.1 million) from its majority shareholder to fund it for another year.
Earlier this year New Zealand-based Martin (ASX:MJP) reported that its majority shareholder, Hong Kong’s KuangChi Science Limited, had raised concerns about the company’s commercial path and board.
The loan announced today “provides adequate funds to the company to enable continued development and commercialisation of jetpacks” for at least the next 12 months.
The Martin jetpack is designed for aerial observation in industries such as construction and communications and rescue operations where fixed-wing aeroplanes and helicopters are unable to go.
“The Directors believe there is value inherent with the intangible assets,” chief executive James West said.
“However, the value in use of intangible assets was determined with reference to future cash flows which are based on subjective and highly sensitive assumptions, [so] the Directors have decided to take a prudent view and will fully impair the NZ$17.6 million value of the intangible assets to nil.”
Martin was suspended on August 30 after it failed to lodge its annual reports, but told investors on Tuesday the statements would be released as soon as possible.
As part of the agreement, the NZ$10 million loan is to be repaid within 12 months, and Mr West said it “would use its best endeavours to complete a capital raising to enable it to repay the loan and any accrued interest”.
If the company cannot pay the loan back in that time, the repayment date would automatically extend by another two months.
Martin had $9.7 million in the bank at the end of June.