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Avanti UK Raises Cash to Fund Next Gen HYLAS2 Broadband ISP Satellite

Posted: 23rd Dec, 2009 By: MarkJ
satellite dishUK satellite operator Avanti Communications has announced the placing of 21,500,000 new ordinary shares of 1p each, which will raise £86 million to fund the procurement, launch and operation of its future broadband Satellite, HYLAS 2. The placing proceeds will complement debt facilities amounting to £194m in aggregate to be provided by The Export-Import Bank of the USA and COFACE.

Avanti’s assessment of the overall market in Europe suggests that there is demand for at least 100 million Satellite broadband installations; though that would surely depend on price and whether the service is better than what Avanti currently offers, which has proven to be very poor for some customers. Reality is often significantly different from statistical predictions.

David Williams, Chief Executive of Avanti, said:

“I am delighted to announce the financing of HYLAS 2, which has been made in a manner which is highly efficient for shareholders. With this second satellite, we achieve three important objectives. Firstly we diversify our risks by launch, satellite manufacturer and geography, meaning that Avanti is a lower risk company.

Secondly we can provide in orbit resilience and redundancy, an important factor in the maturity of our offer to larger customers.

Finally we gain access to some exciting high growth markets whilst also providing existing customers in Europe with further capacity once HYLAS 1 is filled. HYLAS 2 is a much larger satellite and therefore greatly increases our revenue and profit potential. With equity dilution of less than 50%, we gain additional satellite revenue generating capacity of 275%.

It is clear to Avanti that the market for Ka band broadband services is growing at a much higher rate than originally anticipated. This project enables us to secure our position as a world leader in satellite broadband and one of the only companies with more than one Ka band satellite."

HYLAS 2 will offer 8,280 MHz of capacity, versus the 3,000 MHz of HYLAS 1. It will have the capacity to serve up to 1 million broadband customers, in addition to the 350,000 which can be served by HYLAS 1. Avanti will seek to procure the HYLAS 2 satellite from Orbital Sciences Corporation (“Orbital”) of the USA and will purchase a Launch Service from Arianespace of France. The HYLAS 2 satellite is planned to launch in the first half of 2012.

However, while this is good news for Avanti, it is all happening long before HYLAS 1, Avanti’s first satellite, scheduled for launch in Q2 2010, has proved it can deliver on its promises and offer a truly superfast broadband satellite service in Europe that is both affordable and can keep pace with modern demands. We still have our doubts.
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