Avanti has market value of just £40m
September 23, 2016
By Chris Forrester
The Financial Times newspaper says that troubled satellite operator Avanti now has a value “languishing at £40 million” (€46m). The report suggests that EchoStar of Denver, and Intelsat, are thought to be potential bidders for the struggling business.
The FT’s report quotes Wilton Fry, an equity analyst with RBC Capital Markets, who argues that London-based maritime and aeronautical satellite operator Inmarsat could itself be at risk of a bid from spectrum-hungry EchoStar.
The report also suggests that recent sharp downturns in the share prices of players such as Eutelsat, SES, Intelsat, EchoStar and Inmarsat – as well as Avanti – means that there could be trouble on the horizon for satellite operators, faced with an excess of capacity. The FT quotes Rupert Pearce, CEO at Inmarsat, who says there is a “massive glut” and usually this leads to consolidation in an industry.
Equity analysts at Exane-BNP/Paribas largely discount the FT report, saying that “overcapacity does not apply to the Video segment (two thirds of revenues and more of EBITDA for Eutelsat and SES) but to the Data segment (the remainder). Inmarsat, Avanti make 100 per cent of their revenues from Data.”