Seraphim Space (SSIT) shares jumped 6% today after the Financial Times reported the Polish government was in talks to invest in ICEYE, the investment trust’s biggest holding, at a valuation “significantly higher” than $1bn (£740m).
The Finnish company, which accounted for just over a quarter, or 25.5%, of Seraphim’s £239m portfolio at 31 March, has developed a constellation of small, cheap and light satellites that use synthetic aperture radar (SAR) to take pictures anywhere in the world.
Using radar pulses from antennae, ICEYE’s satellites can form high-definition images that have won the company a string of defence and intelligence contracts.
In the first three months of this year these included a $230m (€200m) deal with the Polish Armed Forces, which agreed to buy three SAR satellites and an option to acquire a further three in the next year to help monitor Russia’s activities on Nato’s eastern frontier.
According to the FT, ICEYE is seeking to raise further capital to increase its annual satellite production capacity from 25 to 100-150. It is considering an initial public offer. The news sent shares in the world’s first listed space fund 4.8p higher to 85p.
As we highlighted in our research note at the end of May, around 78% of Seraphim’s portfolio has defence applications. The recent growth in military spending amid rising geopolitical threats has coincided with some easing in the fears over US tariffs, with the trust’s shares rallying from 48p in early April during a rebound in markets that has boosted other previously over-sold investment companies.
Seraphim’s recovery was fuelled by a positive third quarter statement in early June when we said the then 45% discount on the shares was “significantly overdone”. Before today’s spike the gap between the share price and underlying net asset value had more than halved to 20%.
