Tech firm Orbital Corporation (ASX: OEC) has launched a fully underwritten one for eight renounceable pro rata entitlement offer to raise gross proceeds of approximately $2.0 million.
The funds will support Orbital UAV’s development and supply of unmanned aerial vehicle (UAV) propulsion systems and flight critical components to Tier 1 UAV suppliers.
The company has expanded its customer and product base over the past two years, and is currently producing engine variants to:
- Textron Systems, a wholly owned subsidiary of Textron Inc.;
- DSO National Laboratories, one of Singapore’s largest defence companies;
- Dynamatic Technologies, South Asia’s leading manufacturer of aerospace materials; and
- a Vietnamese security and technology company.
Funds raised from the Entitlement Offer are proposed to be directed towards:
- expanding contracted production programmes;
- driving product research and development into a new engine model;
- repatriating key supply chain componentry from international suppliers; and
- facilitating general working capital.
FTUAS - Textron engine demand
Orbital UAV is the primary engine partner to Textron Systems for their supply of the Aerosonde 4.8 quad UAS into the Future Tactical Uncrewed Aircraft System (FTUAS) program to replace the US Army’s existing fleet of tactical unmanned aerial vehicles.
Through this long-term partnership, Orbital has successfully designed, integrated, and field tested a series of 150cc class engines and are now primed for volume orders at award of the program. Indicative demand from Textron suggests initial orders could value between $15m and $20m per annum for propulsion units, parts and support.
Other development programmes and outlook
Orbital is currently in production across four engine models for its existing client base. Through the success of the diversification strategy, Orbital has met and exceeded milestones to repay its WA Government loan and has submitted a claim for full repayment by 31 December 2024. This milestone award will mean Orbital will be debt free from the second half of FY25.
Orbital UAV continues to expand its product range with an additional engine development programme.
The new engine design has already received prototype orders from its major Singapore customer, DSO National Laboratories, and will address UAS needs with maximum take-off weight targets up to 180kg.
