Avanti Communications Share Discussion Threads

[badger60] 13/3/2018 08:01

Rns........... interestingly, Globecomm has been bought and sold twice in the last 5 years by private equity investor groups. Could a sale to a private equity group, as terryebby has talked about here before, be what Avanti is being polished up for? Surely with such undervalued assets, it must be an interesting target.........

[terryebby] 11/3/2018 23:27

all this confusion will be cleared up shortly when the swap closes. The debt holders would not be accepting equity if they did not think it was good for then, would they ? So THEY think the share price will go up, and that should benefit us all

[cassius clay] 09/3/2018 14:17

I think closer to launch will see the share price improve dramatically.

[badger60] 09/3/2018 14:14

........ whichever way that you cut it, the current 12pps seems to be far too cheap. Perhaps the share price is being held back pending a successful satellite launch?

[cassius clay] 09/3/2018 14:14

I think that the Inmarsat bid came in before Avanti invited bids. They had other bids then but all were turned down.

[diamondsp] 09/3/2018 14:13

JakNife I never said my figures were materially correct (look up the word 'circa') I am trying to work out how this impacts on share price I also said I am open to corrections. You seem to have a weirdly aggressive attitude. Aren't we all here to learn from each other and better understand the pros and cons of buying/holding?

Far too little time on my hands to get into an argument about it anyway. It's an important issue for current shareholders and I think we'd do well to try and put a semi-accurate figure on it.

[cassius clay] 09/3/2018 13:58

And the bid was turned down, apparently.

[diamondsp] 09/3/2018 13:36

This is exactly where th confusion lies - the residual debt actually IS part of the market cap calculation. It's a lead weight holding it down...

Current market cap is only £15 million precisely because of the 750 million debt. The market is effectively valuing the company today at 765 million.

Look at it this way - if we stumbled upon 750 mill and repaid all the debt, what would our market cap be then??? So the latent debt very much affects the market cap and has to be included in these calculations - and the earlier figures I ran are my best bet at working it out.

[badger60] 09/3/2018 13:17

It is certainly a bit confusing as there seem to be a few possible permutations. The residual debt after the swap is not part of the market cap calculation....it just remains as outstanding debt. If the outstanding £400mio of 2023 debt is converted to equity at current market prices (12p), then they have effectively lost 2/5ths, or 40% of the value of their loan to the company by converting to equity. They need circa 20pps to get their money back, and anything more is a profit.......ergo the satellite launch fanfare etc. is very important, and terryebby's idea that they are packaging and cleaning up the company up for a sale @ circa 30pps after the d/e swap makes a lot of sense.

[diamondsp] 09/3/2018 12:37

JakNife there is an implied share price in that the bond holders are exchanging x amount of debt for z amount of shares. The amount of shares they get will enlarge the share capital by a fixed amount whilst reducing the net debt by a fixed amount. It is therefore possible to calculate an implied share price. I'm just not quite sure I'm doing it correctly.

Badger I previously thought the same as yourself it's only when I ran those figures I changed my mind. I also previously had a niggling doubt that it couldn't be so simple or else the market would have bought it up to the 18p level by now - easy money wouldn't get ignored for so long?

I think your 20p calculation may be neglecting the debt which still exists in the company??

[badger60] 09/3/2018 11:41

.......on the basis of your calculation, the 164 Mio shares that current shareholders hold will be worth circa £32mio of the newly capitalised company which values the shares at a tad under 20p (or £432mio ÷ 2.164 BN = 19.96p).......so we could be in for an 8pps conversion bonio over today's share price :+)!!

[diamondsp] 09/3/2018 09:13

Hi Badger,

This is an issue I've been trying to get my head around as well. I contacted investor relations 8 days ago asking for clarification on the implied share price of the issue but as yet have had no response.

But here are my calculations:

Current market cap at circa 12p per share of circa £15 mill
Debt circa 750 mill
Company valuation £765 million

We swap £400 mill debt for 92.5% of the company.
400/92.5 x 100 = £432 million (i.e. 92.5% for 400 million equates to 100% for 432 million)
Still left with debt £350 million

So company valuation after the swap of £782 million - a rise of just 17 million or about 2.2%

So whilst I think this is a great deal for current shareholders in that it allows the company half a chance to survive and hopefully thrive, it does actually seem to be done at fairly close to current value.

I am very open to being corrected on this as it's a complex one but this is the best way I can see to work it all out.

[badger60] 08/3/2018 09:09

terrebbyHave bought a few more.....and will continue to do so. Could you be so kind as to tell me the answer....APPX £400mio in loan notes due 2023 are being swapped for circa 2 BN (92.5% of the company) in shares..= 20pps. Given that the current share price is circa 12p, does this mean that there will be more shares issued to loan note holders? or are current equity holders in for a 8p gift?...or are loan note holders effectively taking a 40ish % loss on doing the swap?If it's the last one, the after the swap there will be 2.164 BN shares in issue with a mkt cap of circa £260mio (@ 12pps).

[badger60] 06/3/2018 12:41

Thanks for that. I will buy more over the next few days.....

[terryebby] 06/3/2018 10:53

i don't think shares will become available plentifully or cheaply since the three Bond holders who control something like 90% sit on the Board and are thus restricted. Its also blindingly obvious that they are going to try to sell the business. The Launch of HYALS 4 is now just two weeks away. Thats is such a big value creating event that I would expect the company to be doing some serious PR and once the satellite has safely gotten into space the value rise should happen. Its going up on an EU rocket and they tend not to blow up, unlike SpaceX or the Russians

[badger60] 06/3/2018 07:09

Bought a few more yesterday. Hopefully the debt for equity swap will make more shares available at lower levels for me to buy, as I have to agree with the more informed posters that going forward asset and business valuations are no where near reflected in the share price.

[terryebby] 04/3/2018 18:13

Perhaps I have not explained my point well enough for which soz.

They provide fixed services as a Managed Service. To provide mobility, in something like airlines you need global Coverage which Avanti does not have. But they can provide RAW CAPACITY which can be used for a fill in, and that is what I now am told by a FM buddy I saw last night is exactly what they have done for an in0named operator whom we are assuming is Inmarsat or Viasat - who have bought raw capacity, but their own uplink switches at the teleport and integrate it to their global network. You don't get great prices for raw capacity (looking back on Old report and Accounts Avanti calls this raw capacity service "Pure'
ALREAY put a press release out about this last year. So my HOPE is that as airlines grow their demand, the lack of capacity under construction in factories means Avanti's scarce capacity, especially the big bird they are about to launch over the Atlantic will be in demand, resulting in a bird at somewhere approach the cost of building the fleet, which implies a share price of at least 30p