Northrop Grumman is to write off a $30 million investment in Kistler Aerospace's K-1 two-stage reusable launch vehicle programme because of uncertainty over Kistler's financing.
The US manufacturer, which is supplying composite structures for the K-1, advanced Kistler the cash late last year when its financing began to dry up. Kistler, in return, agreed to give Northrop Grumman $30 million worth of preferred stock.
Kistler had hoped to raise $450 million by the end of last year - most of it through a debt offering. This approach was postponed and instead Kistler sought private placement to raise funds.
Northrop Grumman says that the Kistler concept "has significant promise for future business" and has agreed to make a further investment of $30 million "prior to flight test, if the K-1 remains a viable launch programme".
The company has restated its 1998 earnings to reflect the write-off of its Kistler stock, reducing its net income for the year by $20 million, to $194 million - down from $407 million in 1997.
Financial problems at Kistler rather than technical deficiencies have slowed development of the first K-1 demonstration vehicle.
The first launch was expected this year, but will not now take place until the first quarter of 2000, from Australia's Woomera launch base. Kistler also plans K-1 launches from Nevada, USA.
Source: Flight International