Israel’s Spacecom to claim Amos 6 $205 million compensation from IAI, $50 million or a free flight from SpaceX after Falcon 9 explosion

Israel’s Space Communication (SpaceCom), Amos 6 satellite’s owners said on Sunday it will receive over $173 million from Israel Aircraft Industries (IAI), which built the Amos-6 satellite, plus interest, a company official said. The total sum from IAI is “approximately $205 million.”

According to SpaceCom they could also seek $50 million or a free flight from Elon Musk’s SpaceX, after its Amos 6 satellite was destroyed last week by an explosion at SpaceX’s Florida launch site.

SpaceCom notified the Tel Aviv Stock Exchange that because the failure occurred before the launch, the company had not invoked the insurance policy covering the satellite.

The company is not public, and it has not disclosed what insurance it had for the rocket or to cover launch pad damages beyond what they were required to buy by the Federal Aviation Administration, which oversees commercial US launches, for liability and damage to government property, according to Reuters.

Globes reports that Spacecom also states TASE that, under the agreement it has with IAI, IAI is obliged to return to it the cost of construction of the satellite with interest at Libor plus 4 percent on each payment it made to IAI. Out of this, Spacecom has to repay the state $17 million. The company states, Globes reports, that once it collects the repayments from IAI, it will be able to repay the bond series of which the bondholders now have cause to demand immediate repayment.

the Israel Space Agency (ISA) head Yitzchak Ben-Yisrael told Israeli radio on Friday the launchpad explosion could jeopardize a pending deal for the sale of the private Israeli firm to China’s Xinwei group, reportedly worth $285 million and conditional on the satellite successfully entering service. This is the second blow, ahead of the Chinese deal, ” he said, recalling the blackout of the Amos-5 satellite, which like Amos-6 was owned and operated by Spacecom.

Spacecom has been hit hard in November 2015, when communication with  Amos-5 sattelite was lost four years after it was launched from Kazakhstan.

“There is a major question about the launch and I very much hope that SpaceCom is strong enough to overcome these things and to order a new satellite, ” ISA head Yitzchak Ben-Yisrael told Israeli radio on Friday.

“If it orders a new satellite, it will take between two and three years to fill the gap.”

SpaceX has more than 70 missions on its manifest, worth more than $10 billion, for commercial and government customers.

Spacecom shares dropped 9 percent on Thursday, with the explosion occurring late in the last trading day of the week. Trading in the shares was suspended on Sunday morning, and the stock plummeted another 34 percent when trading resumed.

Amos-6 was to be used by a number of key clients, including Facebook and Eutelsat Communications which leased the satellite’s broadband services to expand internet access in Africa. Both firms are pursuing other options, the companies said in separate statements after Thursday’s accident.

The cause of the accident is under investigation. Neither SpaceX, nor the FAA which is overseeing the investigation, have said how much damage the explosion caused at SpaceX’s primary launch site at Cape Canaveral Air Force Station in Florida.

SpaceX said on Friday that it would shift flights to a second launch site in Florida, which is nearing completion and which was last used to launch NASA’s space shuttles.

Thursday’s accident, which occurred as the company was fueling its rocket as part of a routine prelaunch test firing, was the second failed mission for Musk’s space company in 14 months. In June 2015, a Falcon 9 rocket exploded about two minutes after liftoff from Florida, destroying a load of cargo headed to the International Space Station.

AFP, Reuters and Ynet News contributed to this report.