It’s been about a year since Marc Bell, the chief executive of Terran Orbital, a US satellite manufacturer, got up in front of staff at the company to tell them he had received “a good Christmas present”.
Terran had been contracted to build the first 300 satellites for Rivada Space Networks, the company founded by Irish telecommunications entrepreneur Declan Ganley, which were to form the first part of Rivada’s OuterNet, an enormous, unhackable, private internet communications network.
However, he reassured his staff, he’d had dinner with Ganley earlier in December where Bell said Ganley “told me they expect to close tomorrow on their funding. He showed me the documents. I saw them, I read them.”
Ganley had continued to keep him updated, Bell said, noting that “as long as it’s by Christmas, I’ll be happy. Nothing wrong with getting a good Christmas present.”
Unfortunately for Bell, for Terran Orbital, and for Ganley and Rivada, that funding was actually a good deal further away than any of them realised.
[ Declan Ganley under pressure to disclose who is paying his legal billsOpens in new window ]
In fact, 2024 has proved to be a very difficult year for all involved in the OuterNet project, while Ganley also suffered his own personal financial difficulties through the year.
In relation to Rivada, Ganley is still in the midst of raising the first $2.4 billion of what is likely to be several billion more required to get around 600 satellites into orbit in the next few years.
Stock exchange filings submitted by Terran Orbital over the past few years show that Rivada has only paid over a small fraction of that amount so far.
In those filings, Terran’s management disclosed that they had signed the contract in the belief that “Rivada was on the verge of obtaining financing for its constellation”, but that Rivada “ultimately did not obtain any material financing during 2023″.
And by early 2024 Terran’s own cash position had begun to decline, leading to “substantial doubts” about its ability to continue as a going concern.
As it desperately examined its options, it was considering a particularly good one – a buyout offer from giant aerospace company Lockheed Martin.
However, at least initially, it turned down that offer in the hope – as the company would later set out in its stock exchange filings – that Rivada could secure the long-awaited funding, which would then hopefully boost the price it could demand from Lockheed.
Unfortunately, the funding never came and instead of Terran being able to command a better price, Lockheed withdrew its initial offer entirely.
Internally, the company had begun to discuss the possibility that the Rivada money might be slower in coming than they had initially expected. In one board meeting, the filings show, the board said it was not relying on anything from Rivada, and would instead have to consider cutting jobs.
In August, in a last-ditch effort to get some cash, Terran’s chief financial officer went to Rivada to ask for “an immediate [advance] cash payment”, which was ultimately not forthcoming.
In the aftermath of that effort, Terran had to go back to Lockheed and strike up another round of negotiations, this time agreeing a sale at much lower price, a decision the company said in those filings was partly down to “uncertainty” over Rivada Networks’ “ability to pay” for the 300 satellites, which had “significantly deteriorated the company’s cash forecast”.
Terran also slashed the value of its contract backlog from $2.7 billion to $312.7 million, in part because of those same uncertainties.
Meanwhile, evidence has grown that Rivada has been experiencing its own cash flow problems, which have become apparent in other parts of its business operations.
While Rivada has been very coy about just how much money it has raised, and from whom, it has endured a number of financial difficulties in recent months, particularly Europe, where Rivada Space Networks is headquartered.
For example, in June, according to reports in German business newspaper Handelsblatt, Ganley wrote to employees of the German-headquartered Rivada Space Networks to say that salaries would be late in being paid. When contacted, the company said, somewhat testily, “Of course Rivada Space Networks is dependent on investment in its pre-launch phase. No satellite company has ever been different, in the history of the world”, noting also that salaries had since been paid in full.
[ Declan Ganley’s ‘OuterNet’ satellite ambitions encounter turbulenceOpens in new window ]
Then in September, the company had a €2.2 million judgment registered against it in the district court in Munich, over an unpaid bill to a satellite contractor called OHB System. Since then an “amiable solution” was reached between the parties.
In November the telecommunications regulator in Liechtenstein revoked Rivada’s licence to exploit the radio spectrum over concerns about Rivada’s business plan. Again, Rivada’s PR team said that this was not a crisis, and that its OuterNet plan was secured “through a mix of filings in different countries and market access”, including in Germany. In any case, the company said, it was working with the Liechtenstein regulator to allay any concerns it had.
Those talks were still going on as of the middle of this month, the company confirmed.
None of this appears to have put off future customers of the OuterNet, and Rivada has trumpeted each one, understandably, given that the total value of pricing agreements comes to $13 billion, in the company’s own analysis.
The most recent of those, and perhaps the most significant, is its relationship with the US military, and in early December it set up Rivada Select, “a new wholly owned subsidiary established as a proxy organization to serve the specialized needs of US government and defense customers”.
As all of this has been going on, Ganley has found himself enmeshed ever more deeply in a bitter battle with one of his own shareholders, David Shuman, a private equity investor based in New York.
The dispute centres on a $20 million (€19 million) default debt judgment that Shuman registered against Ganley in a court in New York, which Shuman has been attempting to enforce over the past year, while Ganley claims the original debt has long been paid and the judgment was not properly granted.
Either way, Ganley has been forced to sell off various assets, auction off shares, turn over companies and, most recently, pay Shuman $20,000 a month to settle the judgment.
He hasn’t always been able to meet those payments, and early on he missed at least one payment, while another was paid by Karl Rove and Company, an entity controlled by the well-known Republican Party strategist and lobbyist, who is also a shareholder in Rivada.
The judge in the case, Judge Jennifer Schecter of the Supreme Court of New York, ruled in September that Ganley was in contempt of court over a number of delays, including the sale of property here in Ireland, and warned him that further punishment could potentially include “a fine or imprisonment or both”.
It has left Ganley with precious few assets. In an information subpoena he filed as part of the dispute, he stated that he doesn’t own the 21-room mansion in Galway in which he lives, which is instead owned by his wife, Delia.
He has also had to sell off his remaining 20,000 shares in Rivada, which were auctioned off in October and raised $400,000 to reduce the debt.
He claimed at the time that the shares were worth a lot of money. Depending on the values achieved by the shares at various fund-raisings, he argued they could be worth between $15 million and $100 million, though the court concluded they were only worth the $400,000 at which they’d sold at auction.
Ganley has argued that he has suffered “significant harm – personal, financial, and reputational” – and been “impoverished” by the loss of the shares. He claims he has been the victim of “breach of contract, fraud, civil conspiracy, and unjust enrichment” by Shuman.
Shuman’s lawyers, in turn, have dismissed such claims, accusing Ganley of having his “lawyers file new claims rehashing his tired allegations”.
With a contempt of court hearing due for January, and the need to raise funds for the OuterNet becoming more urgent as the deadline for launch draws nearer, 2025 could be a make or break year for Ganley and Rivada.
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