Hot on the heels of news June 5th that it has won a $20 million arbitration award, Avanti Communications says that it has certain additional funds available to it. The company said back in April that is seeking to raise additional funds of “at least” $50 million, and needs to have in place “$40 million of infrequently recurring revenues” by the end of June 2018.
Avanti, in a document released to shareholders ahead of the recent financial restructuring, said: “The Directors forecast that revenue for the current financial year will not be less than $50 million. In addition, there is a large infrequently recurring transaction in the pipeline that, if it closes, would add a further $40 million to Group revenue, with $18 million of associated costs, in the current year. With effect from the end of the current financial year, the Company expects substantial growth in revenue driven off the introduction of HYLAS 4 to the fleet opening up new markets in sub-Saharan Africa.”
The above statement comes from Avanti’s letter to shareholders issued early in April. But the document also cautioned that: “If the Restructuring completes but the Company is unable to raise Additional Funds of at least $50 million and secure $40 million infrequently recurring revenue in pipeline by 30 June 2018 then based on the projected cash flows of the Group, the Company will, within the 3 months following 30 June 2018, be highly likely to be unable to pay its creditors, as and when they fall due for payment.”
It now emerges that Avanti can access cash, up to $14.5 million, under its Super Senior Facility (subject to agreement from HPOS Investment Partners), plus another $30 million that is in place on its 2021 Notes borrowings (subject to completing its planned restructuring).
The satellite operator can also tap into up to $5 million which would be available following on from the proposed restructuring and can also place up to $30 million in new equity, again following on from the restructuring. It is this $30 million that observers expect to materialise via a new share placing.
The proposed restructuring was announced in April and was agreed by shareholders.
However, the news did little to help Avanti’s share price which tumbled 13.85 per cent (to 4.51 pence) yesterday, June 7th, an all-time low for the business.