Satellite company Spacecom Satellite Communications Ltd. (TASE:SCC), controlled by Shaul Elovitch, aims to raise NIS 300-400 million in a bond offering, sources inform "Globes". Security for the debt will be one of the company's Amos satellites.
Spacecom plans to use the cash to recycle a loan taken from a consortium of lenders, including Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), in late 2009. The loan was $140 million, and partially financed the purchase of the Amos 5 satellite. Spacecom's financial statements show that it drew down $129 million of the loan, with the amount now outstanding being $134 million.
The loan agreement was recently amended. Spacecom will speed up repayment. It will repay $15 million shortly, $5 million more within six months, and another $5 million in each of the years 2014-2016. The balance of the loan will be repaid at the end of December 2016, instead of December 2018.
Spacecom also undertook to raise debt within six months against the security of its satellites, Amos 2, and/or Amos 3, and/or Amos 5. The money raised is to be used to accelerate further the repayment of the loan, up to full repayment. It undertook that, until full repayment is made, its cash flow from the Amos 2 and Amos 3 satellites will be used to finance the activity of existing satellites, and not to purchase new ones.
Spacecom has a market cap of NIS 1.2 billion on the Tel Aviv Stock Exchange. Elovitch, who also controls Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), owns 64.7% of the company, through Eurocom Group. In late 2011, Eurocom sold 3.7% of Spacecom to Menorah Mivtachim Holdings Ltd. (TASE: MORA) for NIS 36 million. The current value of Elovitch's holding is NIS 751 million. Satellite broadcaster DBS Satellite Services (1998) Ltd. (YES) of the Bezeq group is a customer of Spacecom. The other shareholders in Spacecom are mainly Israeli institutions.
In the past few weeks, Spacecom has announced two new contracts for use of the Amos 5 satellite, which started to operate last year, providing telecommunications services in Africa. One of the new contracts is for multi-channel television broadcasts, worth $3.8 million for five years; the other is with a customer who provides Internet and data services, and is worth $3 million for three years. There have however also been difficulties in connection with the satellite. At the end of January, the company reported that a customer that had signed a contract for providing telecommunications services via Amos 5 had frozen the project, which was supposed to be worth an average of $6.5 million a year. The company also plans to provide telecommunications services in Asia via the Amos 4 satellite.
Spacecom made a loss of $2.3 million on revenue of $86.1 million in 2012, after posting a $7 million profit in 2011. It had positive cash flow of $33.6 million last year. Its total bond debt at the end of 2012 was NIS 945 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 4, 2013
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