Sky's no limit as Li backs rocket man

PUBLISHED : Monday, 31 March, 1997, 12:00am
UPDATED : Monday, 31 March, 1997, 12:00am

Investors who look to the heavens for inspiration can now put money in a company that might actually help them get there.

United States-based Kistler Aerospace Corp is looking to Hong Kong to help raise the US$400 million it needs to develop a reusable rocket launcher - an as yet unproven technology.

The venture has caught the eye of the Hong Kong business community. Li Ka-shing, Lee Shau-kee and Larry Yung Chi-kin are among the early investors.

Kistler chairman Robert Wang, brought up in Hong Kong, was coy about how much capital they had put in. 'It is a substantial amount,' he said.

Mr Wang clearly hopes other investors will be encouraged to follow the lead of the big names. 'Many Hong Kong investors want to diversify their holdings and you can't get more different than getting involved in satellite launches,' Mr Wang said.

He has his sights on investors in Malaysia, Indonesia, Australia and Taiwan.

Kistler has raised about $50 million through an industry consortium and is looking for another $125 million through private placements. The remainder could be raised through a public offering in the US.

The concept of a reusable rocket is new, although Kistler is not the only company trying to develop one.

Satellite delivery has been born out of national space programmes, like Nasa or China's Long March series. The European Space Agency - which launches the Ariane rockets - does have commercial backers drawn from interested parties across the continent.

Kistler is working on a transportable two-stage launcher that will parachute to earth after delivering a satellite into low Earth orbit (LEO).

If the technology lives up to expectations it should bring launch and insurance costs of satellites down substantially. Mr Wang planned to charge about $17 million per launch.

Between now and 2005 almost 2000 LEO launches are planned. These are lightweight small satellites primarily designed to make point-to-point voice and data communications possible virtually anywhere on earth. Motorola's Iridium project, for example, has 66 satellite launches planned alone.

A Kistler test flight is scheduled for next year.

In its pitch to investors Kistler is relying heavily on the pedigree of its board of directors. Chief executive and technical team leader George Mueller was the former head of Nasa's manned space flight programme.

Other executives have at different stages been deeply involved in the US space programme in senior roles.

'These people have always worked on government sponsored projects, now we are giving them a chance to do their thing in a commercial setting,' Mr Wang said.