Defence, space and communications manufacturer Electro Optic Systems has had a financial lifeline extended for a second time, even as it displays its world-leading products at the Land Forces 2022 Expo in Brisbane.
The Canberra company has had the maturity date of a $35 million term loan facility provided by investment group Washington H. Soul Pattinson extended, but only until October 7.
WHSP, which is a major shareholder in EOS, had previously extended financing arrangements with EOS while financing was discussed.
It had also provided a one-year, $20 million working capital facility to EOS.
That financing was announced with the company’s first half results which saw the company report an operating loss of $98.9 million, with $54 million of that attributable to the impairment of assets in satellite systems company SpaceLink.
However EOS continues to be positive about its financial future in its brief announcements to investors.
EOS said in a statement: “The company continues to work with WHSP on a longer-term financing structure for EOS.”
WHSP is a diverse investment house with major shareholdings in building materials group Brickworks, but also extensive property interests.
EOS is a highly capably defence contractor but in recent years embarked on a massive expansion into communications and, most lately into satellite communications with its planned SpaceLink communications relay satellites.
While achieving technical success recognised by the US Government as having potential for use in US space strategy, the expansion placed a capital burden on the company, something exacerbated by supply chain disruptions and difficulties in accessing its global customers.
The extent to the company’s problems can be seen in a fall in the company’s share price from a high of $10.50 in 2020 to around 50 cents.
Picture: Electro Optic Systems