Spacecom Satellite Communications Ltd. is readying its IPO on the Tel Aviv Stock Exchange (TASE). The public tender is scheduled for Monday, March 7, when the company will try to raise NIS 160 million in an issue of convertible bonds, shares, and options.
Last week, Spacecom held the institutional tender for the issue, which accounts for 80% of it. The list of the orders in the issue prospectus indicates that over half the institutional orders came from entities affiliated with the two lead underwriters, Apex-Mutavim Investments and Clal Finance Underwriting Ltd.
Altogether, Spacecom is offering 460,000 packages in the institutional tender, out of a total issue of 575,000 packages. The prospectus implies that entities affiliated with Apex-Mutavim (such as DS Securities & Investments (TASE: DSIN), Apex, and Yuvalim's mutual, provident, and advanced training funds) ordered 118,342 packages. Entities affiliated with Clal Finance Underwriting (such as policies of its parent company Clal Insurance Enterprises Holdings Ltd.'s (TASE: CLIS), and Clal and others' mutual and provident funds) ordered 118,678 units.
In other words, entities affiliated with the two underwriters ordered 51.5% of all packages offered in the issue. It should nevertheless be noted that these entities ordered the packages at the highest interest rate of all the institutions participating in the issue. The tender was held at a fixed price and interest rate on the bonds, i.e. 4.5%, while the maximum interest rate in the tender was 5%. These orders will therefore be the last to be answered; in effect they are a safety cushion for the issue's success.
Spacecom operates the Amos 1 and Amos communications satellites. The company's largest customer is satellite broadcaster YES. Other customers include the Israeli government, the Second Television and Radio Broadcasting Authority, Israel Broadcasting Authority, Israel's cable companies, and US cable company HBO.
Spacecom is now working on its next project - Amos 3. Development of the satellite has begun, and Spacecom has received quotes for building it. Spacecom is planning Amos 4 for later. Amos 2 cost Spacecom $130 million, the starting point for the cost of Amos 3, which is much more complex and sophisticated. On the hand, as in other fields, the technology has become cheaper. Amos 3 will probably cost a few tens of millions of dollars more than Amos 2.
Spacecom is owned in equal shares by Eurocom Communications, General Satellite Services Co. (GSSC), Israel Aircraft Industries, and C. Mer Industries (TASE: CMER).
Published by Globes [online], Israel business news - www.globes.co.il - on March 3, 2005