Oxley's Ching has stake in NewSat, which is suing banks for withdrawing credit

Company in which Oxley Ching has a large stake is set for litigation against financing banks in Oz

Ching Chiat Kwong, executive chairman of Oxley Holdings 5ux, is embroiled in a court case in Australia, funding a suit claiming damages of US$5 billion from the financing banks and credit insurer over a failed satellite company, NewSat. The hearing is on July 7.

Back in 2011, the Australian satellite company, NewSat, had agreed to have a satellite, Jabiru-1, delivered to it and ready for launch from French Guyana in May 2016. The total cost for development and launch was estimated at US$600 million.

In 2013, Ching invested US$60 million in NewSat for a 30% equity stake. Among the financing banks and financial institutions were the Export-Import Bank of the United Staties, credit insurer Compagnie Française d'Assurance pour le Commerce Extérieur (Coface), and Standard Chartered Bank. According to the Australian Financial Review (AFR), other lenders included Credit Suisse, and in total, NewSat raised US$600 million. NewSat was listed on the ASX and is now suspended.

By 2014, there were funding issues including alleged breaches of financial facilities. NewSat’s executives had already forward sold the satellite’s capacity. Lockheed-Martin, the manufacturer of Jabiru-1, issued a notice of default to NewSat. Bank funding was subsequently withdrawn causing Newsat to be suspended on the ASX in 2015.

According to the Australian press, NewSat founder and chief executive Adrian Ballintine – allegedly a lover of expensive lunches - was pursued by ASIC (Australia Securities and Investments Commission) investigators in the wake of NewSat’s collapse.

Some market observers believe that the company has the potential to be a "good company" as it was able to sign some US$700 million of sales prior to the Jabiru-1 launch. Prior to its credit issues, triggered by Ballintine, NewSat had plans for four more satellite launches to serve emerging markets in Asia and Africa, market observers noted.

Earlier this year, it was reported in the Australian media that NewSat’s financiers are being sued. Reportedly, Ching is ready to go to court alongside the liquidator to litigate against the lenders. Newsat’s liquidator is Glenn Livingstone of WLP Restructuring. The case goes before the Supreme Court of Victoria on July 7.

According to the Australian media, Ching is funding NewSat’s liquidator to engage international litigation experts Quinn Emanuel and King’s Counsel Philip Crutchfield and Martin Scott. He has also pledged at least another A$20m for the suit, according to the Australian press.

The Australian says the damages claim of US$5 billion is partly based on the potential for a substantial increase in the number of communications over and above the initial contract base as NewSat had global approval for more satellite spaces.

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