APT Satellite Holdings is seeking a bank loan to partly fund the Hong Kong-based operator’s new US$216m contract to deliver its Apstar-9 satellite in 2015.
The company has yet to decide the debt to internal funding ratio for this consideration,…
APT Satellite Holdings is seeking a bank loan to partly fund the Hong Kong-based operator’s new US$216m contract to deliver its Apstar-9 satellite in 2015.
The company has yet to decide the debt to internal funding ratio for this consideration, although in the past the split has been 50:50.
Its contract, with a subsidiary of China Great Wall Industry Corporation (CGWIC), includes a US$3.02m fee to satisfy ITU rules by arranging a satellite to hold Apstar-9’s 142E orbital slot until it is ready. It also comprises a US$1.5m incentive payment if the contractor delivers the spacecraft to its launch site on or before 10 September 2015.
Because CGWIC’s parent is state-run China Aerospace Science and Technology Corporation (CASC), which indirectly owns just over half of APT Satellite, the contractor and its owners are banned from a shareholder vote to approve the contract.
A date for this vote will be announced around 13 December, when a circular will also be issued with a recommendation from Investec Capital, which has been hired to advise an independent board committee on the contract.
APT Satellite declined to comment further on how it will finance its next spacecraft. Bank of China (Hong Kong), which has led its financing in the past, was unable to comment before the press deadline.
In a stock exchange filing, APT Satellite said Apstar-9 will use its 32 C-band and 14 Ku-band transponders to build on the coverage of Apstar-5, Apstar-6 and Apstar-7 satellites to “help achieve various synergies including economies of scale and the formation of cooperation alliance with customers for business development”.
As of 30 June 2013, the utilisation rate on Apstar-5 at 138E was 82.33%, Apstar-6 at 134E was 87.24% and Apstar-7 at 76.5E was 75.08%. For that date it posted total liabilities of HK$1.877bn (US$242.15m) and around HK$1.12bn (US$144.85m) of cash and bank deposits.
The company plans to develop a customer base for Apstar-9 before its launch by leveraging on a capacity leasing deal it already shares with China Satellite Communications Corporation (CSCC), which is also part of CASC.
That deal enables APT Satellite to use CSCC’s capacity in mainland China for when it is unable to meet end-user requirements. The agreement also lets the two companies use each other’s capacity in markets outside the country.
APT Satellite’s stock exchange filing also revealed that, after its shareholders approve the contract for its latest spacecraft, Apstar-9’s contractor has an option to buy up to 35% of its transponders.
