London-based speciality satellite operator Avanti Communications has borrowed another $30 million and been given an additional lifeline by its lenders for its $145 million-worth of borrowings.
But the money comes with a sting in the tail. The lenders have granted an extension to the repayment obligations to Avanti, setting January 31st next year as the maturity date.
Avanti released what it described as a trading update on February 15th confirming the headline terms of the debt restructuring. However, even this trading update somewhat cheekily was for a Q3 (ending September 30th 2019) and thus almost 18 months ago. The trading update for this very old quarter said revenue for the quarter was $17.1 million, including bandwidth revenue of $15.2 million. The period-end cash balance was $25.9 million and the period end backlog was a claimed $141 million.
One can only hope that Avanti’s financial controllers know what they are doing and that the “2019” date on the documents actually meant 2020.
Another recent (Interim Results) statement talked about trading to June 30 2019 and reported a backlog of $156.4 million. If correct – and when compared with the already mentioned Q3/2019 – this means that Avanti’s backlog has shrunk by some $15 million.
The problems extend beyond the trading update. The market knows that as this year unfolds the supply of new capacity from the likes of Eutelsat, OneWeb, Viasat and even SpaceX will challenge its own sales efforts.
There’s also unfortunate news that Avanti has not been filing its formal business information on time to the UK’s Companies House. The last full year accounts were for the year ending December 31st 2018 and its 2019 numbers should have been filed by the end of 2020. Companies House has issued an “Accounts Overdue” warning to Avanti.
Avanti, on February 15th, said that over the past two years under CEO Kyle Whitehill it has focussed on three growth areas:
• Government – defence missions and critical public services
• Carriers – cellular backhaul for Mobile Network Operators (“MNOs”)
• Industry – wholesale to satellite operators and integrators.
“The move has led to significant growth and new contract wins,” said Avanti. “In particular, the Group secured three major contracts with MNOs and tower companies towards the end of 2020, collaborating with them to provide cellular backhaul across Africa using our HYLAS 4 satellite. We also continue to provide a resilient backhaul service to EE and the Home Office for emergency services in the UK, which, in addition to backhaul contracts with a number of other African carriers, means that Avanti is the leading provider of Ka-band cellular backhaul services to MNOs across EMEA.”
Whitehill added: “The material maturity extension and additional capital injection represent a strong vote of support from our existing investors in the business, its prospects and the management team. We have a strong pipeline of opportunities for 2021 and beyond, including growing revenues from defence partnerships and from our fast-growing Carrier business, putting us in a position to continue to drive revenue and further accelerate our growth in the future.”
The extra $30 million of borrowing was a vote of confidence, Whitehill said, and the recent Q4 had seen “slight” growth y-o-y.