Lockheed sells its stake in Russian space ventures
Friday, September 8, 2006, 09:30
Lockheed Martin Corp., the world's largest defense company, plans to sell its stake in two satellite-launching joint ventures as the company reduces its commercial space business to focus on government customers. The ventures, Lockheed Khrunichev Energia International Inc. and ILS International Launch Services Inc., were created with Russian partners and are being sold to closely held Space Transport Inc. Terms weren't disclosed, Lockheed spokesman Tom Greer said yesterday. The move steps up the Lockheed's five-year effort to cut back its commercial space business after demand withered. The Bethesda, Maryland-based company will be increasingly focused on manned space efforts after winning a $3.9 billion award from the US National Aeronautics and Space Administration last week to build the next spacecraft to carry astronauts to the moon. „The real money is going to be made in military launches and in manned space for NASA,” said Marco Caceres, a Fairfax, Virginia-based space industry analyst with Teal Group. „With NASA, you're talking about billions of dollars, and Lockheed being the prime space player. A joint venture with the Russians where you split the profits of a limited commercial market is not going to grow a lot.” Lockheed Khrunichev Energia, formed with two Russian government-owned space companies in 1992, has exclusive rights to launch commercial, non-Russian-origin space payloads on Proton rockets from a site in Kazakhstan. Under the ILS brand, the venture provides mission management support for launches of Lockheed-built Atlas and Khrunichev's Proton and Angara rockets. Lockheed also makes the A2100 commercial satellite. Shares of Lockheed rose 25 cents to $83.50 at 4:01 p.m. in New York Stock Exchange composite trading. They have risen 31% this year.
The Russian ventures are part of Lockheed's space systems business, which accounted for $6.8 billion, or 18%, of the company's total revenue of $37.2 billion last year. Lockheed doesn't provide sales figures for the joint ventures, Greer said. Satellites accounted for 61% of the group's sales, and launch services accounted for 20%, Lockheed said in a regulatory filing in February. The Russian venture received four new awards for launches on Proton vehicles in 2005, and ILS was awarded 10 contracts for launch services using Atlas or Proton vehicles, the filing said. At the end of 2005, Lockheed's balance sheet included $315 million of advances received from customers for Proton launch services not yet provided, the filing said. The sale will close in the fourth quarter and won't have a material effect on Lockheed, the company said. Space Transport is registered in the British Virgin Islands and owned by Mario Lemme, Greer said. Lemme couldn't immediately be located. Lockheed announced the sale of its satellite telecommunications services business to Intelsat Ltd. for $90 million in 2004. (Bloomberg)