24 April 2024
Filtronic
plc
("Filtronic" or the "Company")
Strategic Agreement with
SpaceX for Starlink constellation
Filtronic secures a long-term
partnership with SpaceX in the LEO space market
Filtronic plc (AIM: FTC), the
designer and manufacturer of products for the aerospace, defence,
space and telecoms infrastructure markets, is delighted to announce
that it has entered into a strategic partnership and commercial
agreement (the "Strategic Partnership") with Space Exploration
Technologies Corp. ("SpaceX"), which designs, manufactures,
launches and operates the world's most advanced rockets and
spacecraft. The Strategic Partnership includes the ongoing supply
of E-band Solid State Power Amplifiers ("SSPA") in addition to the
development and supply of similar products at other frequency bands
within SpaceX's Starlink platform.
The Strategic Partnership contract
was executed with an initial irrevocable purchase order of $19.7m
(£15.8m) to supply E-band SSPA modules, scheduled for delivery in
FY2025, with further order flow expected to continue thereafter to
support the ongoing deployment of SpaceX's Starlink constellation,
which provides high-speed, low-latency high-speed internet to users
all around the world.
As part of the Strategic
Partnership, the Company has is issuing a total of 21,712,109
warrants to SpaceX across two tranches, to enable SpaceX to
subscribe for up to a maximum of 10% of the Company's existing
share capital, with such warrants expected to vest, on a variable
basis, with full vesting of the warrants once approximately $60m
(£48m) of orders have been placed by SpaceX. The two warrant
tranches, which are split equally, are detailed below:
Tranche 1: a maximum of 5%
vesting on a variable basis from order flow of the E-band SSPA
platform; and
Tranche 2: a maximum of a
further 5%, also vesting on a variable basis, for order flow of
products developed at alternative frequency bands which would
involve partnering with SpaceX on new product
development.
Summary of Warrant Terms
1)
Filtronic is issuing SpaceX with equity warrants up to a maximum of
5% of its existing share capital (10,856,055 warrants) and such
warrants will vest based on the receipt of purchase orders against
a staged vesting profile for E-band SSPA modules. All warrants in
this tranche will fully vest once SpaceX has placed a minimum of
$37m (£30m) of irrevocable purchase orders with
Filtronic.
2)
Filtronic is issuing SpaceX with additional equity warrants up to a
maximum of another 5% of its existing share capital (10,856,054
warrants). Such warrants will vest based on the receipt of purchase
orders, against a staged vesting profile for SSPA modules at other
operational frequency bands. The warrants in this tranche will
fully vest on a similar profile to those in point 1.
3)
The strike price for the warrant 33 pence, being the closing
mid-market price of Filtronic's ordinary shares of 0.1p each on 23
April 2024, being the last business day before the Strategic
Partnership contract was executed.
4)
SpaceX must place a minimum order value in each subsequent 12-month
period from the Contract Date of $10m to be delivered within 12
months. SpaceX must also maintain a cadence of order flow, so that
the timing between purchase orders does not surpass a 12
month-period. If order flow is not maintained in accordance with
these two tests, within the 5-year warrant period, then the
warrants will expire 6 months from that date.
5)
The warrants will expire five (5) years from the date the Strategic
Partnership contract was executed. The warrants will expire earlier
if certain minimum order volumes are not met by SpaceX. Vested
warrants can be exercised in whole (or in part, in minimum amounts
of 500,000) at any time prior to their expiration, to the extent
the agreed vesting conditions have been satisfied.
21,512,000 of the warrants are being
issued utilising (to their full extent in this particular regard)
the existing shareholder authorities granted at the Annual General
Meeting of the Company held in October 2023, with the remaining
balance (of 200,109 warrants) to be issued following the grant of
similar authorities at this year's Annual General
Meeting.
Richard Gibbs, Chief Executive Officer, of Filtronic
commented: "We are delighted to
enter into this important Strategic Agreement with SpaceX, a market
leader in LEO satellite constellations. This milestone development
in our SpaceX partnership underlines our core value proposition of
high-quality engineering and operational excellence. It also
provides Filtronic with the opportunity to scale manufacturing,
build capability and execute our technology roadmap. The team
at Filtronic are excited to formalise and develop our existing
relationship with SpaceX and secure the ongoing supply of E-band
SSPAs. We also look forward to working alongside the SpaceX
engineering team to develop new products for use in the Starlink
system."
Mike Nicolls, SpaceX's Vice President of Starlink Engineering
commented: "Filtronic has been an outstanding supplier for Starlink. They
have matched our rate ramp and increasing demand for high-quality
parts. Their strong engineering teams have taken ownership of their
production process to meet our needs, taking their designs from
wafer to functional unit, and are delivering quality parts in
E-band which will enable the Starlink network to continue to grow
and connect millions of more people around the world with
high-speed, low-latency broadband internet."
Enquiries:
Filtronic plc
|
Tel.
01740 618800 or investor.relations@filtronic.com
|
Richard Gibbs (Chief Executive
Officer)
|
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Michael Tyerman (Chief Financial
Officer)
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Cavendish Capital Markets Limited
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Tel.
020 7220 0500
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Jonny Franklin-Adams/George Dollemore
(Corporate Finance)
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Sunila de Silva (ECM)
|
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Walbrook PR Limited
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Tel.
020 7933 8780 or filtronic@walbrookpr.com
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Nick Rome
Joe Walker
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Note: This announcement contains inside information which is
disclosed in accordance with the Market Abuse
Regulation.