The space logistics company D-Orbit said on Aug. 12 that it had canceled plans to go public by merging with Breeze Holdings Acquisition Corpa Special Purpose Acquisition Company (SPAC).
The Italian company hoped to raise $ 185 million from the deal to expand staff and accelerate investments in ION Satellite Carrier, its orbital transfer vehicle (OTV) which completed its first commercial mission in late 2020, however ” the financial markets have changed substantially “since the agreement was announced on January 27, said the Breeze CEO Douglas Ramseyamid rising interest rates, rising inflation and an ongoing war in Ukraine.
“Looking ahead, we remain focused on identifying another value creation opportunity for Breeze shareholders”
Ramsey added.
However, the growth trajectory of D-Orbit remains on track despite market conditions “beyond our control”, as stated in a statement. CEO Luca Rossettini.
The company said it has delivered more than 80 customer payloads to their orbits so far this year with three ION missions and plans to carry out three more ION missions by the end of the year, and last week D-Orbit announced a agreement to launch 20 nanosatellites in three years for the Swiss startup Astrocast with ION.
D-Orbit spokesperson Caterina Cazzola said that:
“our plan to go public is simply on hold for now and when the time comes, we will evaluate the opportunity for a public listing and the best strategy to do so “.
D-Orbit the first case of a series of course changes?
A difficult macroeconomic environment has also resulted Tomorrow.iobased in the United States, to cancel plans in March to accelerate its constellation of commercial weather radar satellites with an SPAC fusion.
SPACs are shell companies that use the money raised from the stock exchange to merge with another company, offering them an infusion of money and a fast track to the public market for future growth, which would have given them even more luster. to D-Orbit.
However, there are doubts as to whether early stage space companies are suitable for public investors because their businesses are typically capital-intensive and prone to delays.
Of the nine space companies that are become public through SPAC mergers in 2021, only Rocket Lab shares ended the year with an exchange value above their price when the merger ended.
Also the demand for new SPAC agreements decreased due to the decline in risk appetite of investors and growing regulatory scrutiny over how these blank check firms operate.
To realize just how delicate the situation actually is, just think that so far, this year alone, according to Bloomberg reports, more than 40 SPAC mergers have been canceled, a situation that probably would not have occurred a couple of times. years ago.
In the space sector, satellite communications equipment maker Satixfy is continuing to work to close its SPAC merger this year, and Satisfy announced its agreement to initiate the merger with Endurance Acquisition Corp on March 8, the day after that. Tomorrow.io canceled its SPAC merger plan due to market conditions.
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