Hong Kong’s Asia Broadcast Satellite (ABS) has refinanced its export credit agency-backed debt to bring the satellite operator’s blended cost of capital down to the high single digits, SatelliteFinance understands.

The recapitalisation, thought to involve senior positions for Goldman Sachs, HSBC, ING and subordinated debt from a Singaporean firm, also gives the private equity-owned company more flexibility to start funding ABS-8, which could be its third all-electric satellite.

US-based Boeing (NYSE:BA) was initially picked to build the spacecraft, however, US Ex-Im Bank’s unavailability and Permira’s attempts to sell the company put those plans in doubt.

ABS was reported last summer to have been approached by strategic players including Spain’s Hispasat, China Communication Technology, and Japan-based JSAT Group (TKS: 9412) with offers in the US$1bn range, according to data provider Pitchbook.

Bloomberg reported earlier this year that a deal to sell the satellite operator to a Chinese entity was in the works. However, ABS CEO Tom Choi (pictured) poured cold water on the speculation, telling SatelliteFinance that it was “unlikely” because its satellites are under US ITAR control.

Given ABS’s positive cash generating position, Permira appears to be in no rush to push through a sale, thanks to the operator’s increasing focus on video rather than data services. 

FSS operators have proved difficult assets for M&A in recent times as the dramatic drop in the cost of capacity has led buyers to ask how much more prices can fall. A significant number of industry watchers attending the Satellite 2017 conference in Washington DC this week said prices could fall further still, pointing to the sheer amount of HTS capacity set to reach orbit in the next few years.

British satellite operator Avanti recently scrapped a sale process after bids came in too low, instead opting for a restructuring that gives more control to its bondholders.

ABS’s equity is largely held by the UK-based fund Permira Europe IV, which has placed on the board Nicola Volpi, Richard Sanders and Sebastian Hoffmann. The PE firm bought ABS for around US$240m in late 2010, funded entirely through equity.

The structure of the company’s balance sheet dates back to 2012, when ABS secured a US$289.71m direct loan from Ex-Im to buy and launch two all-electric Boeing satellites on a SpaceX Falcon-9 rocket. Another direct loan, for US$171.29m, financed the purchase of the ABS-2 satellite from Space Systems Loral.

Ex-Im has been locked out of signing off sizeable loans for nearly two-years, and it remains to be seen whether the Trump Administration could pave the way for the bank to once again play a major role in the industry.