Still no news on the sale of Permira's ABS. The sale was announced in the same week when AVN announced its strategic review. In the meantime AVN has announced it received five bids but rejected them all. There have been articles one month ago saying ABS may get sold to a Chinese buyer. The CEO of ABS has in the meantime said that a sale to the Chinese is highly unlikely. Still, the sale is proceeding and in its final stages (google I think it's a spacesat or so article). Could we still see a combination of AVN and ABS? Remember resolution 3 of the 29 Dec grants the power to the board to issue 33% new shares. Valuing ABS and AVN at fundamental values probably means that this could finance an ABS/AVN combination. Could it be...? We know that we need to get the earnings update still in February (was in the financial calendar of one of the more recent announcements). Would make sense for them to bundle the earnings announcement with an ABS/AVN merger....
Some years ago the AVN BoD said (I think in an annual report) that their aim was to build a business generating 500M EBITDA. This was on the basis of all the satellites being in service up to Hylas 4. Since then Hylas 2b capacity has been added. I think the target is in USD terms but I'm not sure as they switched to reporting in USD from GB£ a few years ago.
very difficult to say what revenue a satellite will bring. Its probably deliberately opaque according to AVN
"It charges in a number of ways: broadband packages, managed capacity, fully integrated project fees, raw capacity, pure spectrum and a number of other product categories and charging models to suit customer and market circumstances."
with all that their capacity utilisation is 25-30% with growth expected in Italy and Spain. Given their costs are pretty much fixed, this is a major issue. Will they fill Hylas 4? That's how I wonder ECHOSTAR 19 is viable
Hylas 4 costs approximately USD 300 million, with an estimated 15 year lifespan. They raised a $157 million bond in 2014 at @8.75. If you straight-line amortise $300 million over 12 years that's $25 million a year. I'm no accountant but the sat needs to bring in a lot more money than that
Maybe we can get Dfid to subsidise an Africa outreach? Or just wing it
I didn't know ECO was an Avanti initiative. The sales team look to be innovative I guess a lot of African sales will be subsidised in one form or another
Hylas 4 seems relatively small compared to the latest generation broadband satellites . The Echo Star 19 (launched last Dec) for North America is twice the size and currently the most powerful broadband sat. North America is a wealthy market and niche customers can pay their own charges. Inmarsat Global Express Satellites are also much bigger than Hylas4 but targeted towards the shipping sector
Maybe they've pitched it right ?
If you read the Daily Mail (like all good private investors) you might have read the factoid that "Africa" is 3x the size of China. Its as big as China, India, the United States AND most of Europe put together. The geographical challenges for 4G fibre seem to be immense and many areas will be isolated
So it could come good with a lot of nimble footwork and creative thinking
I have been in here since the £7 days, expecting #1 launch success to make it to £9 rather than £3.50! Topped up at £2.20 , my idea of th lowest possible prie at that time.
The coverage of a huge continent without the need to lay countless miles of vunerable cables seemed a great idea, and it still does to me. I still have hope the business will catch on one day. The e-cigarette took several attempts before enough people latched to make it viable business. Have said it many times, Avanti should have targetted the UK outreaches where they could have made sales at sensible prices instead of starting up in Africa with no historical successes.
Just hope I'll survive long enough to see the dream come true!
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