Israel’s Spacecom plans to pay for its AMOS-8 communications satellite by raising U.S.$110 million through collateral bonds and bond options, just as the bid by IDB Development Corporation Ltd. to buyout Spacecom’s parent company has expired.
Announced in a Tel Aviv Stock Exchange filling on Sunday, Spacecom said it will issue a series of new collateral bonds worth U.S.$50 million, guaranteed by AMOS-8 and its assets. The company also plans to issue U.S.$60 million worth of bond options.
Late last month, IDB Development Corporation Ltd., through its subsidiary, Discount Investment Corporation, made a U.S.$45.75 million bid for the acquisition of a controlling stake in Spacecom. On Monday, in a filing to the Tel Aviv Stock Exchange, Discount announced that its offer has expired due to Eurocom and its creditors’ failure to approve the deal. Discount also said it is continuing to examine a possible investment in the company.
Spacecom is a subsidiary of holding company Eurocom Group, the controlling stakeholder of Israel’s largest telecommunication provider Bezeq. Eurocom, its subsidiaries and its co-owner Shaul Elovitch, are facing a total debt of around U.S.$420 million, and the future of the company is currently at the hands of its institutional creditors, which include Israel’s three largest banks.
According to a report on calcalistech.com, this decision to combine collateral bonds with bond options keeps the collateral bonds held by Eurocom’s creditors at 35%, allowing them to keep a controlling stake in Spacecom.
The AMOS-8 satellite, to be built by Space Systems Loral, is intended to replace a satellite lost in 2016, when Spacecom’s AMOS-6 satellite was destroyed in a pre-launch explosion. Because of this explosion, Spacecom lost a U.S.$95 million leasing deal with Facebook, as well as a planned U.S.$285 million acquisition by Shanghai-listed telecommunication technologies supplier Beijing Xinwei Technology Group Ltd. Spacecom was also forced to lease a replacement satellite for U.S.$22 million a year.