AVN.L Regulatory News (AVN)

16 Jul 2007 07:01

Avanti Communications Group Plc16 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 thesuccessful completion of a key milestone in the development of its satellitebusiness which significantly reduces project risks. In addition, Avantiannounces a trading update following the satisfactory conclusion to itsfinancial 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 forits HYLAS project. Interest is charged at 10.5% above LIBOR and accrues to berepaid at maturity as a payment in kind. The facility can be redeemed after 30months. The syndicate of lenders comprises funds advised or managed by AvenueCapital Group, funds advised by JO Hambro, Capital Management, CaledoniaInvestments plc and Frost City Limited, an entity controlled by Mr RobertTchenguiz. In addition, and as part of the overall financing package, fundsmanaged by Avenue Capital Group will also subscribe for 2,000,000 new ordinaryshares, representing approximately 7.2% of the issued share capital of theCompany, at 200p per share. The participation in the facility agreement by Caledonia Investments plc, whichis providing £7m of the total facility, constitutes a related party transactionunder the AIM Rules. The directors of the Company (other than William Wyatt whois a related party by virtue of his connection with Caledonia Investments plc)consider, having consulted with the Company's nominated adviser, that the termsof the transaction with Caledonia Investments plc are fair and reasonableinsofar as the Company's shareholders are concerned. The debt facility provides sufficient capital for Avanti to complete thefinancing of its satellite construction, launch, insurance and operationtogether with working capital. No further funding is expected to be requiredfor 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 withmarket expectations. Significant progress has been made during the period, aspreviously announced, with the selling of Network Services using Avanti'sinterim capacity and Avanti enters the new financial year with a strong pipelineof potential HYLAS capacity pre-sales. The marketing process for HYLAS pre-salesbegan in earnest during the second half of financial year 2007 with the arrivalof new sales and marketing staff. Pipeline proposals under discussion withpotential 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 thekey financing milestone of the HYLAS project. The debt has been raised on termswhich are competitive by reference to our peers in the satellite industry andfrom high quality investors. This achievement significantly reduces risks inour first satellite project and give us greater confidence in our futureprospects." Enquiries: Avanti Communications Chief Executive - David Williams 020 7749 1600 Hoare Govett Justin Jones / Hugo Fisher 020 7678 8000 College Hill Sara Musgrave / Carl Franklin / Rozi Morris 020 7457 2049 Avanti Communications Group Avanti Communications Group is the only licensed fixed and broadcast satelliteoperator headquartered in the UK (and one of only nine such groups operating inEurope). In August 2005 Ofcom awarded Avanti the right to provide satelliteservices using the geostationary orbital position at 33.5 degrees west with3.6Ghz of radio spectrum which provides coverage of Western Europe and most ofCentral and Eastern Europe. The Company's first satellite HYLAS, is financed andunder construction for delivery in December 2008. HYLAS uses unique technologies to provide highly flexible and cost effective satellite capacity. Avanti Communications currently provides satellite telecommunications servicesto customers in Europe (using leased satellite capacity) which will transfer toHYLAS on launch. Avanti sells wholesale HYLAS capacity to telecoms and mediaservice providers in Europe. The core applications for which Avanti expectsHYLAS capacity to be used are broadband, corporate networks and videodistribution. This information is provided by RNS The company news service from the London Stock Exchange