CMMB Vision has sold new shares representing 12.1% of its enlarged stock for HK$90.9m (US$11.7m), boosting working capital for a plan to deploy multimedia satellite services directly to mobile devices across China. SatelliteFinance understands the financing will precede a much larger fundraising exercise on course to be secured in the coming weeks, split between about US$300m in equity and US$300m in debt.
CMMB Vision (HKG:0471) has sold new shares representing 12.1% of its enlarged stock for HK$90.9m (US$11.7m), boosting working capital for a plan to deploy multimedia satellite services directly to mobile devices across China.
SatelliteFinance understands the financing will precede a much larger fundraising exercise on course to be secured in the coming weeks, split between about US$300m in equity and US$300m in debt.
The bigger facility will partly fund the Silkwave-1 satellite its US partner New York Satellite Holdings (NYBB) ordered from Boeing earlier this year, as well as another bird that could be procured from either Boeing or China’s CGWIC.
Sources said the equity element will be raised against a special purpose vehicle that will be created underneath CMMB to hold all its assets and operations in China.
It has hired an investment bank to raise the debt. Despite getting re-authorised earlier this month, it is thought that US ECA Export-Import Bank reopened its doors too late to join the initial facility. The bank could be brought in for future funding rounds.
CMMB is also thought to have plans to list its new SPV in the US or China – or perform a backdoor listing – in the next three to four years.
The Hong Kong-listed company declined to comment.
The group told its stock exchange today that it sold 757,499,997 new shares for HK$0.12 each, or 13.78% of its existing share capital. This was a discount of about 0.66% compared with their HK$0.121 average closing price over the last five trading days.
It has completed three other share placement rounds in 2015, raising HK$48.8m (US$6.3m) in January, HK$189.9m (US$25m) in June, and HK$7.2m (US$929k) in October.
Chi Capital, the private equity firm of CMMB’s chairman and CEO Charles Wong, remains its largest significant shareholder with a 25.22% stake.
CMMB announced a key partnership in October with a subsidiary of China Telecom (HKG:0728), one of China’s largest telcos, to operate L-band spectrum on an aging satellite called AsiaStar. The deal marked an important step to gain a foothold in the country’s highly regulated satellite service industry. CMMB also has a partnership with Global Broadcasting Media Group, a subsidiary of China Radio International, one of three state-level and national media broadcasters.
AsiaStar, bought by NYBB last year, was launched in 2001 to 105E, where Silkwave-1 is expected to be placed when it is ready in Q1 2018.
As well as the whole of China, CMMB plans to use Silkwave-1 to target Asian ‘One-Belt-One-Road’ countries such as India, delivering services ranging from vehicle-based digital radio and internet to mass-market mobile TV directly to devices on the ground.
Silkwave-1 will be based on Boeing’s 702 platform and is being designed to have a transmission power some 100 times greater than AsiaStar, which has about six to eight more years of useful service in orbit.
