Perth unmanned aerial vehicle engine manufacturer Orbital UAV is to raise $6.5 million from investors to support the development of new engines for global drone manufacturers.
The company yesterday announced it would upgrade the engines on United States-based Textron Systems’ existing fleet of Aerosonde tactical UAV’s, with the company also developing completely new engines for Boeing offshoot Insitu, Northrop Grumman and an unnamed Singapore defence contractor.
Orbital told investors today it would raise the cash through a renounceable entitlement offer to shareholders with funds also going to ‘enhance the company’s Australian production facility (pictured) capabilities and drive research and development’.
Major shareholders including UIL Limited, First Sentier Investors as well as the directors of Orbital have provided commitments to take up their share entitlements, which will raise $2.8 million.
Orbital has been investing in diversifying its customer base in recent times and is now working for four Tier 1 defence sector prime contractors.
This should lead to the expansion of the company’s production profile from two to six engine production lines over the next 24 months.
Orbital’s strategy appears prudent with the company reporting it is in talks with its biggest customer Insitu which may lead to the reduction or removal of minimum order requirements under its long term contract to supply engines to the company.
Orbital said: “This is due to increasing competition within the tactical UAV market and a reduction in intelligence, surveillance and reconnaissance (ISR) missions following the US military withdrawal from Afghanistan.”
Insitu is now taking a more ‘conservative volume outlook’.
Picture: Orbital UAV
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