Several investors have expressed “serious” interest in acquiring German satellite imagery provider RapidEye out of bankruptcy protection, SatelliteFinance has learnt.
“The group has received interest from many investors from all around the world -…
Several investors have expressed “serious” interest in acquiring German satellite imagery provider RapidEye out of bankruptcy protection, SatelliteFinance has learnt.
“The group has received interest from many investors from all around the world – easily in double digit figures – the question is how many of these are really interested in buying the business,” said a source close to the negotiations.
“There are no front runners at the moment, but I’d say a handful of them, half a dozen, are serious.”
A separate source close to the process told SatelliteFinance that the majority of interested parties were strategic players, “from around the activities of RapidEye”.
One analyst specialising in the earth observation sector suggested Astrium Services would be the most likely buyer.
“It’s the obvious choice, and in some regards makes sense: They already offer the most varied data types, this would be something different, they also have a very well used reseller network, and they offer the value-adding services that RapidEye tried,” said the analyst, who asked not to be named.
Back in 2010, Astrium, which was unable to comment before the press deadline, merged its remote sensing subsidiaries, Spot Image and Infoterra, into a single division.
Because RapidEye holds a satellite insurance contract that expires around the end of August, it is understood to be keen to finalise a sale process this month, allowing a new owner to negotiate a new agreement.
Legal firm Leonhardt Rechtsanwalte was appointed as administrator after RapidEye had filed for Germany’s equivalent of US Chapter 11 bankruptcy protection on 1 June, following breaches to several loan covenants.
Only a few entities act as the group’s creditors, mainly a banking trio comprising Germany’s KfW and Commerzbank and Canada’s Export Development Corp, meaning it is able to benefit from a relatively streamlined bankruptcy process.
RapidEye CEO Wolfgang Biedermann declined to comment on the sale negotiations, but reaffirmed that “there is a strong likelihood to come out of [its bankruptcy process] fairly quickly”.
Despite the ongoing restructuring talks, RapidEye has been experiencing healthy sales, according to Biedermann.
“We’re still on target to achieve our revenue targets for 2011,” he said, adding that he anticipates further “significant growth going into 2012/2013”.
To support this growth, Biedermann hinted that the group could even raise additional financing in the near future.
He explained: “With new investors we hope to start the detailed planning phase for the next generation of satellites soon.”
On 4 August, administrator Leonhardt Rechtsanwalte issued a press release stating that 16 parties had expressed interest in buying RapidEye.
“Negotiations with potential buyers are intensive and ongoing,” stated the firm’s Professor Rolf Rattunde.
“We continue business operations after the opening of the insolvency proceedings until a purchase can be completed. However, I am quite confident that we will reach a restructuring deal that we can present to our creditors for agreement still in August.”
No further details about the negotiations were disclosed.
RapidEye’s current banking consortium provided approximately 50% of the group’s E160m start-up capital in 2004, partially secured by government guarantees, helping it to launch five 150kg EO satellites in August 2008. The rest of this funding came from system suppliers and German space agency DLR (25%), and subsidies (24%) from the State of Brandenburg, the German federal government and the EU.
Its banking consortium had been concerned that the group’s overall level of debt was too high for its current business. RapidEye reported revenue of nearly E10m in 2009, and just under E14m for 2010 after missing out on a few large contracts.
Meanwhile, recent reports have suggested that fellow satellite imagery specialist GeoEye has hired Goldman Sachs to look into strategic options for the company, including a potential sale.
A sale process for the US group is thought to have been on the cards for some time. Its management have been eyeing a sale in either 2011 or 2012, according to one banker. GeoEye declined to comment.
