Japan space startup Astroscale aims for June listing, sources say

Ispace

05/04/2024 01:35

By Sam Nussey and Miho Uranaka
       TOKYO, April 5 (Reuters) - Space junk removal startup
Astroscale is targeting a Tokyo listing as early as June,
sources said, taking the high-profile venture public in a sector
with out-of-this-world prospects and down-to-Earth risk.
    The 11-year-old Japanese company spoke to overseas
institutional investors in March to gather feedback before
making a decision on a listing, said two people familiar with
the matter, declining to be identified as the information is not
public.
    The lead managers are Mitsubishi UFJ Morgan Stanley
Securities and Mizuho Securities, the people plus a third person
said.
    Founded by ex-government official Nobu Okada, Astroscale has
won government backing in Japan, the U.S. and Britain as it
develops technology to remove orbital junk such as disused
satellites and spent rockets which are seen as a collision risk.
    The firm considered going public last year but postponed due
to factors including a mismatch over valuation, and may push it
back again depending on investor feedback, one of the sources
said.
    Astroscale, which is also developing technology to extend
the life of satellites, sees ispace  9348.T  as one reference
for a potential valuation. The moon explorer listed last year
and is worth around $450 million after a recent share slide.
    Astroscale did not reply to requests for comment by email
and phone. Mitsubishi UFJ Morgan Stanley Securities and Mizuho
Securities declined to comment.
    
    RISK TOLERANCE
    The government is fostering its space sector with backing
for startups as well as industry heavyweights like Mitsubishi
Heavy Industries  7011.T , as it works with the U.S. and
competes with China.
    It aims to double the size of the domestic space sector to 8
trillion yen ($53 billion) by early next decade.
    In listing, Astroscale would follow in the steps of ispace
as well as satellite imaging firm Institute for Q-shu Pioneers
of Space (iQPS)  5595.T , whose share price has risen more than
700% since its December initial public offering.
    "Space startups are booming and will be popular among retail
investors" amid attention on space firms as governments offer
backing to the sector, said analyst Kazumi Tanaka at DZH
Financial Research.
    However working out business forecasts for some is
difficult, he said.
    Though market sentiment is generally positive with the
Nikkei share price average at near record highs, institutional
investors look at the space sector critically due to the risk
involved, one source said.
    Last month's explosion of the Kairos rocket from Japanese
launch firm Space One underscored the dangers.
    Tokyo-based ispace suffered failure with its Hakuto-R moon
landing mission in April last year. It issued new shares last
month to overseas investors and raised 8.4 billion yen, but only
after halving the number of shares.
    One foreign institutional investor who participated in the
offering said the stock was not one to be held long term due to
the unclear business outlook. 
    The investor has already sold the shares, they said.
    "From the perspective of institutional investors entrusted
with money and looking at market risk-return, ispace clearly
exceeds their risk tolerance," said one of the sources.
    The price of ispace shares has fallen almost a third since
the start of March and is trading below the 871 yen issue price.
    "We are extremely proud of the confidence that both retail
and institutional investors in Japan and around the globe have
shown in ispace," the company said in a statement, adding that
it has a robust business plan with achievable goals.
    A second ispace moon lander mission is scheduled to launch
this year. The firm will start a NASA-sponsored moonshot in
2026.

($1 = 150.9000 yen)

 (Reporting by Sam Nussey and Miho Uranaka; Additional reporting
by Kantaro Komiya; Editing by Christopher Cushing)
 ((sam.nussey@tr.com;))