Saudi Arabia-based Arabsat has won the battle to acquire Greek satellite operator Hellas Sat in a €208m deal.
Arabsat agreed to buy a 99.05% stake in the group from Greek telecoms incumbent OTE, which announced plans more than a year ago to sell the…
Saudi Arabia-based Arabsat has won the battle to acquire Greek satellite operator Hellas Sat in a €208m deal.
Arabsat agreed to buy a 99.05% stake in the group from Greek telecoms incumbent OTE, which announced plans more than a year ago to sell the asset to support the refinancing of its debt.
The consideration comprises an enterprise value of €157m, representing 7x Hellas Sat’s 2012 EBITDA, and €53.4m for the cash held by the satellite operator. OTE said it will also receive €7m in dividends from the deal.
The Hellenic Aerospace Industry (HAI), a state-owned group that was one of the minority shareholders of Hellas Sat, will retain a stake in the group to represent the interests of the Greece and Cyprus governments.
OTE CEO Michael Tsamaz explained: “The Greek and Cyprus governments partner with a reputable operator, who can undertake the necessary investments to retain the sovereign rights of Greece and Cyprus in space and safeguard their position as space-faring nations.
“Hellas Sat is being sold to a leading satellite communications operator with substantial growth prospects and with a keen interest to develop further its presence in the economies of Greece and Cyprus. OTE divests Hellas Sat at a satisfactory price, allowing us to focus on our core business.”
Barclays provided financial advice to OTE, which expects to close the deal in Q2 following regulatory approval. Arabsat said its financial and legal advisers were led by Renaissance Capital and Generation Alfa, with Pamboridis LLC, DLA Piper and KPMG Greece also providing advice.
The deal represents an expansion from Arabsat’s core Middle East and African markets. The company currently operates six satellites, and the transaction will see it pick up the Ku-band Hellas-Sat 2 spacecraft that was launched in May 2003.
Khalid Balkheyour, Arabsat’s CEO, said: “This step outlines Arabsat’s determination to pursue its strategic plan to grow its resources in terms of expanding to new orbital slots and new frequency rights, and to enter new markets.
“In 2012, Arabsat has presented before the satellite industry its vision to move from regional to global and become one of the top five satellite operators in the world by the year 2020. This transaction, in addition to the new 6th satellite generation program encompassing the design, manufacturing and launch of three new satellites from now until 2016 proves that Arabsat is on the right track to achieve its vision.”
Balkheyour said the group will design, manufacture and launch a new bird for Hellas Sat, called HS-3, which will be “one of the largest satellites in Europe”.
Although Hellas Sat’s current satellite is aging, the opportunity to acquire its associated orbital slot and regulatory allocations had drawn the likes of SES and Eutelsat to the operator. Last year OTE obtained a 20-year extension for Hellas Sat’s 39E position, enabling its use until 2041.
Eutelsat CEO Michel de Rosen told investors last July that acquiring Hellas Sat would be consistent with its strategy when it looks at opportunities for inorganic growth, although organic growth remained a priority for the company.
SES CEO Romain Bausch had also made no secret of his interest in acquiring Hellas Sat, however, he flagged political issues that could block a foreign company’s approach for the group. SatelliteFinance understands Israeli satellite operator Spacecom was also eyeing the asset.
OTE is 40% owned by Deutsche Telekom, Germany’s telecoms incumbent. The Greek state has a 10% stake in the operator.