[FPSPACE] MirCorp statement

[Dwayne Allen Day]

[Okay, here I go again...  Indulge me.]


> MirCorp Announces Results of Board Meeting: New Programs Supported 
> Moscow, Amsterdam, December 12, 2000   

It turns out that there is less here than meets the eye--their official
press release contains less information than the Wall Street Journal
article on Tuesday.  And the WSJ article was more enthusiastic.


> de-orbiting, the Board took a decision to cease the marketing of theMir
> space station. 

Written plainly:  they have abandoned their previous business strategy.


> Over several days of very open discussions, the Board noted the commercial
> success of MirCorp in attracting major customers in tourism and in the
> media, and elected to continue the operations of MirCorp as the leading

Note that they are splitting hairs here--the fact that they have failed in
their primary mission of making Mir successful is ignored.  This is like a
grocery store trumpeting its commercial success at selling breath
mints--sure, but did you make a profit?


> Specifically, the Board elected to pursue the following markets: 
> 
> --Development and utilization of a man-tended module capable of being
> docked to the International Space Station; 

This is apparently NOT the Energia/Spacehab "Enterprise" module.  It is
one of two science modules that the Russians were obligated to
supply.  Spacehab made an overture to MirCorp a couple of months ago and
they were rebuffed.  They indicate in a space.com article that MirCorp has
not been in contact with them at all, and make a dig at MirCorp for
conducting business transactions in the newspapers rather than the meeting
room.


> --Commercial utilization of Energia production lines for manufacture of
> space transportation vehicles on a commercial basis; and 

Translation: continuing to buy Soyuz and Progress spacecraft when they
need them.  This does not indicate an attempt to market launch services
commercially.


> --Development of commercial infrastructure to support the International
> Space Station, from communication satellites to the tether program. 

Now I think this is interesting.  It indicates a shift in their target
customer.  Instead of going for private customers, they now want to sell
stuff to the ISS partners (i.e. NASA, since NASA has the deepest pockets).

Question:  Does ISS need more communications capability than it will get
from TDRS?


> The Board determined that where possible, all existing customers will have
> their programs fully implemented. 

Translation:  Tito and Destination Mir will be accomodated if NASA says
okay.


> As a sign of support, the existing investors of Gold & Appel and
> Dr. Chirinjeev Kathuria pledged a new round of financing to be completed
> within six weeks. This new round  a minimum of $6 million U.S.  will be

Now here is the meat of the press release!  Note that a few weeks ago,
Jeff Manber gave an interview where he said that the primary investors
would sink $10-12 million into MirCorp by December.  Now they are talking
about HALF that much in another month.

Put more simply, this "big news" for MirCorp is actually a scaling back
of their plans of a few weeks ago, coupled with a redirection of their
effort, jumping off the sinking ship and trying to grab onto the one in
the construction dock.

This does not increase their chances of success in any way.  They still
have to raise a LOT more money than they have in their first year of
operation:  you cannot run a successful business by continuously losing
money for your primary investors.


> used to begin the programs listed above, and to expand the current
> management team in order to find new investors. 

This is something they should have done six months ago.  But I don't think
that finding new investors is going to be all that easy (remember that
just a few weeks ago they were talking about signing on a third major
investor in the near future--that has not happened).


> The financial investors also announced they have retained the services of
> Aon Insurance  leading risk analysts for space and technology ventures  to
> work with potential investors in creating a financial structure allowing
> investment in our new programs to move forward. 

They had KPMG Peat Marwick do an analysis for them months ago, right?  One
wonders if any of these companies are going to tell them the truth about
how tough this business is.


> In the end, the technical situation was too complex to allow the safe
> maintenance of both ISS and Mir.

Translation:  we didn't make any money.


> By continuing our operations, and
> entering into discussions with major investors, we believe the dream
> espoused by all of us will flourish. 

And once again we see why these guys will not succeed--they talk about
their "dream" rather than their plan to make money.  Furthermore, it is
worth noting that hooking onto ISS is not the "dream" that a lot of space
activists were so excited about.  In fact, with this latest move, MirCorp
looks less and less like an independent space commercialization effort and
more like an aerospace contractor.



DDAY