Israeli satellite operator Spacecom (TASE:SCC) has raised NIS860m (US$224m) in two institutional bond offerings, hot on the heels of striking a high profile payload deal with Facebook (NASDAQ:FB).
Israeli satellite operator Spacecom (TASE:SCC) has raised NIS860m (US$224m) in two institutional bond offerings, hot on the heels of striking a high profile payload deal with Facebook (NASDAQ:FB).
The first bond raised NIS 529m (US$138m) and carries a maximum annual fixed interest rate of 6.2% that is tied to the Israeli shekel, according to local reports citing its stock exchange filing. The second carries a 6.5% coupon linked to the US dollar and raised NIS331m (US$86m).
They are both due in 2023 and received an orderbook in excess of US$312m in total, added the reports.
The notes came as Spacecom announced that Facebook has agreed to use the entire broadband payload on the Amos-6 satellite it is launching in H2 2016, helping the social media giant realise a long-held goal to provide connectivity to large parts of Sub-Saharan Africa.
David Pollack, Spacecom’s CEO, was cited saying the group expected to make US$95m on the project over five to seven years, and that it could strike similar deals with Facebook later down the line.
Facebook is working with Eutelsat (EPA:ETL) on the initiative, with the latter using it to help step up its broadband activity in Sub-Saharan Africa to focus on premium consumer and professional segments. The French fleet operator is creating a new London-based company that will steer its African broadband business under the leadership of Laurent Grimaldi, founder and former CEO of Italian telco Tiscali International Network.
Facebook has been looking at using satellites to provide connectivity to underserved regions since announcing its Internet.org initiative two years ago. It is searching for more partners across Africa to deploy satellite and terrestrial capacity across rural areas.
Fellow internet giant Google has similar aspirations to deliver the internet to the two thirds of the world’s population without affordable internet access. It has been experimenting with systems based on balloons, drones, and in 2014 bought Earth observation startup Skybox Imaging to boost these plans.
For Spacecom, the deal with Facebook and Eutelsat last week helped bump up its shares by about 15% over three days. The group is owned by Eurocom, a private holding company controlled indirectly by Shaul and Yosef Elovitch.
Eurocom came close to selling a majority of Spacecom last year to Spanish satellite operator Hispasat, which bid a reported €350m (US$398m). Eurocom was reported to have been seeking US$500m-US$600m, and the talks were eventually called off in August 2014.
