UrtheCast secures US$142m loan amid financial strains

Vancouver-based startup specializing in Earth imagery has been struggling to generate revenue

UrtheCast Corp. plans to use new funding to construct, launch and deploy six satellites

Vancouver-based UrtheCast Corp. (TSX:UR) will keep its doors open for the foreseeable future after securing a loan worth US$142 million amid ongoing financial strains.

The Earth-imaging company announced over the holiday weekend it landed the senior credit facility from senior lenders to help construct and deploy six satellites and supply working capital.

The financial relief comes after UrtheCast closed a $34.4-million private placement earlier this month.

But just last month it was unclear whether UrtheCast would still be operating in a year’s time.

The company acknowledged in April it couldn’t guarantee its current cash flow from operations would be sufficient enough to cover its commitments, obligations and operating costs for the next 12 months.

As of April 30 the company had $4.8 million cash on hand, down from $7.5 million a month earlier.

UrtheCast’s most recent financial results revealed revenue dropped from $111.3 million in the 2016 fiscal year to $40.4 million in 2017.

Meanwhile, net losses grew from $29.3 million a year ago to $31.8 million by the end of the 2017 fiscal year.

The company said the drop in revenue stemmed from changes and delays to various contracts.

UrtheCast co-founder Wade Larson departed as CEO in March.

Board director Greg Nordal has been serving as interim CEO since then.

UrtheCast share prices were trading as high as $4.34 a share in 2015 but have since fallen to $0.28 a share as of 10:45 a.m., May 24.