16th Sep 2016 07:35
LONDON (Alliance News) - Avanti Communications Group PLC on Friday said it has initiated a two-phase funding strategy and has engaged in discussions with a number of interested parties about potentially selling the company.
Avanti said upon completion of due diligence by interested parties it will request best and final indicative offers for a potential acquisition or any strategic investment in the company. Avanti noted that there was no certainty a satisfactory offer or any other strategic transaction will be forthcoming.
In order to afford Avanti the necessary time to complete its strategic review to the point where prospective offers for an acquisition of Avanti are formally submitted or potential financing options are ready to be implemented, the company said it was launching a consent solicitation process.
Avanti said it was seeking to amend the indenture governing its senior secured noted to facilitate paying the coupon due on October 1 of USD32.3 million with additional secured notes on the same terms instead of paying cash.
In order to further support its strategic review process, Avanti said it has entered into binding agreements with "certain suppliers" to defer around USD39.0 million of capital expenditure payments relating to its HYLAS 4 satellite launch, but said the launch schedule was not affected by the deferral.
Avanti said the support of the investor group in the consent solicitation process represents a significant step towards addressing its immediate financing requirements and said it will continue to finalise a longer-term refinancing solution.
In a separate statement on Friday, Avanti said it has signed a new contract with the European Space Agency to receive funding to bring rural African communities online.
The satellite data communications services said it signed the new contract through its Advanced Research in Telecommunications Systems Partner programme.
The programme is looking to provide affordable satellite broadband connectivity to 1,400 community sites across Sub-Saharan Africa over the next two years and uses Avanti's new ECO Wi-Fi hotspot initiative.
The European Space Agency will contribute up to EUR10.7 million in funding to be used towards the programme.
Avanti said to deploy its technology platform, it will partner with satellite communication provider Newtec and a group of service providers, using satellite, Wi-Fi and solar power to deliver the programme in the market.
Memorandums of understanding regarding Avanti's ECO system have been signed with the South African Ministry of Communications and signal distributor Sentech in South Africa. In Kenya, the memorandums of understanding have been signed with entertainment operator Wanachi Group, and African-based internet providers Intersat and Imarsat.
Solar-powered ECO Wi-Fi hotspots will be hosted at schools that will benefit from subsidised internet access, Avanti said.
Consumers and local businesses, within range of the ECO Wi-Fi hotspot, will use the ECO mobile payment app to make micropayments for broadband credits which convert to data usage., the company added.
"Through product innovation and a partner strategy we have found an economically viable way to deliver broadband to low income customers in rural Africa," said Chief Executive David Williams.
"Working with governments and local service providers, and with support from European Space Agency, this first project is a significant step towards creating something that will address a need across the entire continent," Williams added.
Shares in Avanti were up 16% at 36.48 pence on Friday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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