Dubai firm saves Swedish drone maker from financial woes

HELSINKI — The Dubai-based investment fund group Bracknor has come to the financial rescue of CybAero Ab, the Sweden-based and Nordic leader in the production of remotely piloted military and civilian aircraft systems.

CybAero has signed a debt-refinancing deal with Bracknor that will ease a critical working-capital burden that threatened to destabilize the drone maker's development, production and export operations.

The financial solution agreed under the deal comprises a $5.25 million capital injection in the form of seven convertible loans to CybAero. Each loan will vary in size from $850,000 to $650,000.

Subversive Capital, a U.S.-headquartered venture capital firm specializing in growth investments, has subscribed for 10 percent of all convertible loans and warrants endorsed by Bracknor.

Prior to the refinancing deal, Subversive Capital controlled a 5.9 percent of CybAero shareholding. This positioned Subversive as the second-largest share owner in CybAero after Swedish banking-insurance group Avanza, which holds 9.1 percent of all shares in the drone maker.

CybAero's financial difficulties, which were compounded by problems linked to delayed exports and revenue gains from China, became clear in June when the company issued a liquidity warning.Its board chairman, Michael Auerbach, informed shareholders and the market that CybAero was facing a liquidity crisis, adding that "capital for current operations would be consumed by the end of June".

CybAero's dire financial situation was negatively affected by problems associated with fulfilling a large order to Chinese customer AVIC Supply and Marketing Huabei. The disruption in the delivery seriously impacted CybAero's revenue intake and significantly reduced its working capital for day-to-day expenses, including salaries.

Sweden's Inspectorate of Strategic Products, or ISP, which is responsible for issuing export licenses for defense- and security-related sales to foreign countries, halted delivery of a CybAero demonstration helicopter system to AVIC.

This decision was reversed by the ISP following an appeal by CybAero.

The ISP's refusal to initially authorize CybAero's unmanned helo-drone system export to China was taken on the grounds of foreign and security policy.

The agency initially questioned the intended use of CybAero's unmanned aircraft system as well as the risk that embedded technologies could be diverted to military actors in China that were outside the realm of CybAero's agreement with AVIC.

CybAero had hoped to sell 20 unmanned drone systems to AVIC. The ISP's intervention to refuse an export license caused AVIC to revoke the original order and framework agreement. CybAero has now re-engaged with AVIC to negotiate a new framework agreement.

More In Dubai Airshow

New US Space Force jammers aim to disrupt China’s SATCOM signals

The Remote Modular Terminals, which disrupt adversary satellites by "yelling in their ear," as one official put it, are cleared for initial fielding,

Space Force must grow to counter China and Russia, lawmaker says

House Armed Services Chairman Mike Rogers, R-Ala., said the service is not sized to meet increasing threats from China and Russia.

SpaceX launches rapid response GPS mission

The effort, dubbed Rapid Response Trailblazer, was meant to demonstrate the ability to quickly plan and launch a mission in around six months.

Space Command strategy aims to boost commercial role in operations

The updated strategy, approved in November, focuses on SPACECOM’s core tasks and how commercial space capabilities fit within those areas.

ULA eyes annual mods to turn rocket stage into space interceptor

The fast-moving vehicle would be highly maneuverable and could be used to tow satellites or for counterspace missions, ULA CEO Tory Bruno told reporters.