It would be great if AVN could launch a Direct To Home Satellite over Africa. It would bring great cash-flow and in combination with Ka band would be a winner. That they haven't reflects European thinking unfortunately.
If there was geographical overlap, the merger would create a company similar to EchoStar. Echo Star Corporation does both and the founder is a multi billionaire many times over
good points Fred. its highly speculative guessing on my end. most likely not happening. but you never know... potential rationale of the top of my head: - ABS is mainly Ku (video) with some Ka (broadband). Merging the businesses would give much needed cash flow stability to avn while it would increase the revenue growth rate of abs by giving them a big entry into Ka broadband. It would improve AVN's balance sheet strength so a combined AVN+ABS that is trading through the current AVN listing would trade much closer to real fundamental value than the standalone avn value is now (it would remove doubt about AVN's leverage). - Geographies: some overlap in Africa as abs has some minor presence there, so they can combine distribution channels in Africa. on top of that abs is all over Asia and it would probably make sense for avn to launch ka band over Asia as well given the combination of population growth and emerging middle classes. - complicated financial deal: would indeed be complicated... maybe thats why the ABS sale process is taking such a long time.
Additional thought: maybe Permira may prefer merging ABS with AVN also because the IPO market for satellite companies must be quite weak. Satellite companies are in the midst of transitioning from traditional Ku to new ka products so a mainly Ku focused ABS would probably not get a great valuation in an IPO at the moment.
But again: very complicated and low probability indeed.
Thought AVN had communicated in a financial calendar in one of its more recent news releases that the 1h fiscal 17 earnings update would happen in February. Not much time left to meet that promise it seems...
Assuming a terminal price (vast and modem) of $500 ea and service plan of $60 per site per month and ignoring all excess usuage charging, help desk or what have you. That someone else is installing... I'd guess the TCV is circa $5M over 5years so not much to get excited about... all IMHO though
just a matter of time before the value of all these contracts signed in the last year, start to come through in the quarterly figures as cash income. As they ramp up we should also see this increase quarter to quarter, then hopefully people will start to see what a cash cow this can become, once satellites start filling up. Once the growth hits a certain level, the debt will become easily manageable, at much more preferential rates. Avanti have now signed major contracts with the main government /ex-government telcos in all the target countries where beams are positioned. i still have high hopes, although i admit it has taken a lot longer than i imagined to get where they are now.
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