Avanti “refinancing” $242m
December 20, 2016
By Chris Forrester
Struggling specialist satellite operator Avanti Communications says it has cancelled its proposed sale and instead will proceed with a refinancing exercise.
Avanti started a review of its business in July when it said it had started discussions with a number of potential investors/buyers.
Avanti has launched a proposed refinancing which will fully fund the company through the creation of $242 million (€233m) of additional liquidity. Of this, $130 million will come from new cash funding in the form of ‘Payment-in-Kind’ (PIK) toggle notes, a type of bond, and $112 million from potential interest deferrals up to April 2018. Avanti say this allows significant working capital in order to launch its HYLAS 4 satellite and grow its capital structure.
PIK toggle notes can pay interest in cash at one rate or, at the company’s option, pay interest in additional PIK toggle notes. The interest paid in additional notes is set at a higher rate than the cash interest rate.
Avanti, it has received agreement of holders representing 73 per cent of its senior secured notes due in 2019 to fully underwrite the $130 million of new cash funding and to consent to certain amendments and waivers to permit the interest deferral.
“Securing the underwriting of core bond investors to launch this major refinancing gives us a high degree of confidence that it will complete in January. After a turbulent year for Avanti, it is important for us to focus all of our attention on delivering outstanding services to our customers and preparing for the launch of HYLAS 4,” Chairman Paul Walsh said in a statement.
“This prized asset will more than double the revenue generating capacity of the fleet, bringing much needed extra capacity to mature markets in Western Europe and opening exciting new markets in West Africa,” he added.
Avanti also unveiled its full-year numbers (to June 30th) showing revenues of $82.8 million (2015: $85.2 million) and a slightly reduced full-year loss of $69.2 million (2015: $73.3 million).