Avanti Communications Share Discussion Threads

[currypasty] 16/7/2007 07:51

RNS Number:2659A
Avanti Communications Group Plc
16 July 2007



Embargoed for Release 07.00 a.m. 16th July 2007

Avanti Communications Group plc
("Avanti" or "the Company")

Debt Fund Raising and Trading Update


Avanti Communications Group plc (AIM: AVN) is delighted to announce the
successful completion of a key milestone in the development of its satellite
business which significantly reduces project risks. In addition, Avanti
announces a trading update following the satisfactory conclusion to its
financial year end.


Debt Facility

Avanti has signed a facility agreement with a syndicate of lenders to borrow
#32m over a term of seven years, which completes the financing requirements for
its HYLAS project. Interest is charged at 10.5% above LIBOR and accrues to be
repaid at maturity as a payment in kind. The facility can be redeemed after 30
months. The syndicate of lenders comprises funds advised or managed by Avenue
Capital Group, funds advised by JO Hambro, Capital Management, Caledonia
Investments plc and Frost City Limited, an entity controlled by Mr Robert
Tchenguiz. In addition, and as part of the overall financing package, funds
managed by Avenue Capital Group will also subscribe for 2,000,000 new ordinary
shares, representing approximately 7.2% of the issued share capital of the
Company, at 200p per share.

The participation in the facility agreement by Caledonia Investments plc, which
is providing #7m of the total facility, constitutes a related party transaction
under the AIM Rules. The directors of the Company (other than William Wyatt who
is a related party by virtue of his connection with Caledonia Investments plc)
consider, having consulted with the Company's nominated adviser, that the terms
of the transaction with Caledonia Investments plc are fair and reasonable
insofar as the Company's shareholders are concerned.

The debt facility provides sufficient capital for Avanti to complete the
financing of its satellite construction, launch, insurance and operation
together with working capital. No further funding is expected to be required
for the HYLAS project.


Dresdner Kleinwort acted as Placement Agent for the Facility.


Trading Update

Avanti completed its financial year on June 30th 2007 with trading in line with
market expectations. Significant progress has been made during the period, as
previously announced, with the selling of Network Services using Avanti's
interim capacity and Avanti enters the new financial year with a strong pipeline
of potential HYLAS capacity pre-sales. The marketing process for HYLAS pre-sales
began in earnest during the second half of financial year 2007 with the arrival
of new sales and marketing staff. Pipeline proposals under discussion with
potential customers amount to total potential lifetime revenue of approximately
#110m, giving us confidence in meeting market expectations this year.


Commenting, David Williams, Chief Executive of Avanti, said:

"I am delighted that at the end of a very busy period, we have delivered the
key financing milestone of the HYLAS project. The debt has been raised on terms
which are competitive by reference to our peers in the satellite industry and
from high quality investors. This achievement significantly reduces risks in
our first satellite project and give us greater confidence in our future
prospects."

[honiton] 12/7/2007 20:40

inmarsat/avanti??

[aa29] 10/7/2007 15:46

I think there's a danger in trying to over-analyze price movements at the moment (that's not being directed personally at you tpip). I wouldn't expect to see a lot of news in the near future.

[tpip123] 10/7/2007 15:30

There was a sudden flury of sells today. Was it just stop losses kicking in that caused a domino effect?

[aa29] 10/7/2007 14:41

As I understand it, they have an offer of facilities in place but I'm not sure how firm that is and I would think that it isn't a committed facility.

The plan is to sign up capacity deals over the next 12 - 18 months and then they can take a block of contracted future income and obtain debt against those income streams. This will be a cheaper source of funding but you aren't going to get that confirmed until next year and they need to sell the capacity before that obviously.

Hope that helps.

[woozle1] 10/7/2007 13:51

Anyone know what's going on with the debt deal?? I'm assuming that this dragging the px down??

W

[anusol] 09/7/2007 17:53

these are cheap IMHO - given that 6 months ago the y were worth over 300p with Screenmedia thrown in. However, it needs a pateient long term hold to reap the benefits - real serious cash flow not due til 2009. I would expect the share price to rise very steady over the next year or so, except, if some big contract is signed to wake some city boys.

[woozle1] 09/7/2007 10:22

Has the worm turned??

W

[alan russell] 07/7/2007 20:22

Small mention in FT as well.

[anusol] 07/7/2007 15:00

positive article in today's Independent newspaper about Avanti Comm. Talks about the huge demand/groth for satellite space and the potential for large future cash flows - recommended buy, but not for widows and orphans.

[s66blade] 05/7/2007 18:57

nice tick up on close

[anusol] 05/7/2007 10:47

perhaps Independent readers read their paper on the way home from work... hence the 24hr delay - still, nice to see some +ve action. That story just reminds that this is one that needs to be tucked away and ignored for a year or two.

[cestnous] 04/7/2007 08:13

Siv
Well spotted.

[sivadnoj] 04/7/2007 07:39

Avanti Communications Group
Edited by Andrew Dewson
285 words
4 July 2007
The Independent
1ST
English
(c) 2007 Independent & Media PLC

BUSINESS | THE INVESTMENT COLUMN

Our view: Risky buy Current price: 197p Avanti Communications demerged out of Avanti Screenmedia in April, but rather than go into orbit, shares in the satellite communications group have crashed to earth. Unfairly perhaps, but most of the selling pressure has come from Screenmedia holders cashing in on their windfall.

As far as risk goes, Avanti Communications is up there in the stratosphere with the best (or the worst) of them. It does not have its satellite yet, does not have the money for the launch or insurance, and the launch itself is not pencilled in until the first quarter of 2009. So why get excited now?

We l, the company is poised to secure the €35m (£23m) of debt that it requires to insure and launch its satellite, called HYLAS. It has also won €24m (£16m) of backing from the European Union and, presuming everything goes according to plan, scope for a further ten satellites within its licensed orbital range.

With demand for digital satellite coverage set to soar, Avanti should be able to gear up returns for shareholders by providing most of the costs through debt. Once up and running, the company should be able to generate significant cash-flow at much lower risk.

Currently, the company is valued at little more than the cash it will have once the debt is secured. That might have been fair twenty years ago when satellites regularly failed, but the current success rate is high and demand for satellite services are growing. Not for widows and orphans, but the sell off since the demerger has created an excellent buying opportunity for high risk investors.

[aa29] 02/7/2007 14:20

But what's going to lift it in the near future ?

The story's known and it's probably going to be a way off before the big deals selling capacity are done.

You could argue that more needs to be done to tell others the story but I'm not surprised to see this gradual decline.

[sirlurkalot] 01/7/2007 09:07

Anyone know why this share's fallen so far?

[piedro] 26/6/2007 12:36

It's called a "market yawn".....
.....the share price lies down and takes a nap. - (associated with company metamorphosis).

[woozle1] 25/6/2007 14:55

anyone knows what's going on. share price getting hammered.

W

[anusol] 25/6/2007 14:51

Has to be seen as long term hold Curry... we seem to be the only muppets stuck with Avanti at the moment.

[currypasty] 25/6/2007 14:03

this is turning into a bit of a nightmare !

[sivadnoj] 15/6/2007 09:37

Broadband customers are all too often left up in the air;Analysis;Opinion
Elizabeth Judge
402 words
15 June 2007
The Times
66
English
(c) 2007 Times Newspapers Limited. All rights reserved

The history of delivering broadband over satellite is one punctuated by bold ambitions and expensive failure.

Players such as Intelsat have successfully exploited a niche market for their services by journalists in war zones and charity workers in desolate locations.

However, attempts to use this expertise to create mainstream products have frequently failed.

Even projects with serious backers such as Teledesic, backed by Bill Gates and Craig McCaw in the 1990s, struggled to fulfill their original bold aims.

Today, alternative satellite broadband and wireless broadband services, such as the PCCW-backed NOW, make up less than 0.1 per cent of all UK broadband connections, according to Ofcom. The problem with providing mainstream services, analysts say, is partly technical.

Providing a "return path" for data is complex. While satellite is an ideal technology for sending data to many recipients, gathering multiple messages from thousands of homes and sending them back to a control centre is complicated.

The cost of rolling out a network or leasing the necessary space is also a deterrent, particularly if alternative delivery services such as DSL and cable can do the job. That is the case in developed countries.

Speed is another issue. Broadband provided by the likes of Inmarsat is far from the whizzy service consumers have come to expect. The service, which counts Air Force One as a customer, provides speeds of half a megabit per second at best.

BT's standard speed is up to eight megabits, while speeds of up to 24 megabits are available from providers such as O2's Be.

The list of operators providing broadband via satellite in the UK is tiny: it includes Skymarket, Avonline and Satlynx. Nevertheless, players continue to enter the market. The recently floated Avanti Communications is betting that its Hylas satellite will one day be able to offer satellite broadband at a price comparable to broadband delivered over telephone lines. It believes it has a ready market with 10 million Europeans who live in areas beyond the reach of fixed-line networks.

In the United States, the race to find viable alternative ways of delivering broadband has gone one step further. DirecTV is preparing to test broadband over power lines. The group says it is "looking at any and all possible opportunities" to deliver it.

[sirlurkalot] 01/6/2007 19:21

Anyone any idea on the value of this contract win?

[plast] 01/6/2007 16:14

afternoon curry, ive got this in my watch list, i thought i would post on here so you dont look like being alone, now where do you see this going from here, it did drop a short while ago, but with 25m shares on the go, it seems that any serious buying will send this flying, i may dip a toe in on this anyway and hold for some news, be lucky, plast.

[currypasty] 01/6/2007 14:11

the news seems to be having a reaction now, albeit a bit delayed

[currypasty] 01/6/2007 11:06

Tom Winni updated his stance from hold to buy