Satellite telecommunications infrastructure provider O3b Networks has raised US$137m in new financing in order to fund the construction of four additional satellites. O3b said that the financing was split between a new US$52m private funding round and…
Satellite telecommunications infrastructure provider O3b Networks has raised US$137m in new financing in order to fund the construction of four additional satellites.
O3b said that the financing was split between a new US$52m private funding round and an US$85m expansion to the company’s existing US$510m Coface-backed senior debt facility.
The equity financing was raised from certain existing investors as well as new investor, the Luxembourgish investment company Luxempart, which also holds a 3% share in SES.
For its part, SES revealed in its third quarter results announcement that it was the largest participant in the funding round, investing US$35m. The satellite operator said that following the investment its shareholding will increase from its current 35.6% to approximately 45% in 2013.
O3b’s other shareholder comprise HSBC, Liberty Global, Google, North Bridge Venture Partners, Allen & Company, DBSA (Development Bank of South Africa), Belgian investment company Sofina and African investment firm Satya Capital.
The additional debt was provided by HSBC, ING, CA-CIB and Dexia, the lead banks on senior debt facility. It is thought that the new debt did not have a significant impact on the terms of the Coface facility although it was priced at a slightly higher rate due to pressures on dollar liquidity.
As with the original US$1.2bn debt and equity financing that O3b secured in late 2010, Portland Advisers and HSBC advised O3b on the debt side of the deal. SatelliteFinance understands that UBS, which advised on the equity portion of the 2010 transaction, did not repeat its role for the additional funding round.
Commenting on the fundraising, Bill Lawrence, EVP corporate development at O3b Networks, who led the financing efforts on behalf of the company, said: “Raising additional financing to support future growth at a time of market uncertainty is an incredibly important milestone for O3b Networks and reflects the confidence that our investors and lenders have in our vision and unique value proposition.”
John Dick, O3b’s chairman, said that the expansion of the fleet from eight to twelve satellites will increase the company’s throughput by more than 90% through a combination of the additional beams deployed and the enhanced link efficiency that a larger constellation of satellites can deliver. The company has already sold a little over a third of its capacity on a global basis with the contracted backlog now standing at over US$600m.
“One of the things that first attracted us to O3b Networks was the idea that the fleet is uniquely scalable,” said Larry Alder, business operations director at Google. “For relatively modest incremental investments, O3b can add meaningful quantities of high quality, low latency bandwidth and deliver it into the emerging world at sustainable and affordable prices.”
As with the first batch, the new satellites will be built by Thales Alenia Space. The satellite manufacturer stated that the first group of eight satellites successfully passed their Critical Design Review in May of this year and the system is on track for an initial launch via an Arianespace Soyuz rocket in the first quarter of 2013, with service expected to start in the second quarter of that year. The four additional are slated to be launched in 2014.
