Avanti secures $55 million credit line

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WASHINGTON — British satellite operator Avanti obtained a credit facility worth $55 million as it awaits the launch of a hosted payload now set to launch in July.

Avanti, in a May 28 filing with the London Stock Exchange, said the credit facility is for a two-year period through which it can take loans with an annual interest rate of 12.5 percent. The company said it plans to use the loans to fund capital expenditures and meet working capital needs.

After experiencing revenue declines since 2015, Avanti said it expects a swing to growth in 2019 thanks to customers on the new Hylas-4 satellite, which launched last year, and the upcoming Hylas-3 hosted payload, set to launch July 24 on an Ariane 5 rocket.

As a proxy for 2018’s financial performance, Avanti said expects to report $32 million in bandwidth revenue — an amount that doesn’t include equipment sales and low-margin projects. Avanti’s 2018 financial results are scheduled for release around June 7, the company said. For 2017, Avanti reported $56.6 million in total revenue, down from $82.8 million in 2016.

Avanti’s bandwidth revenue falls short of the estimated $80 million it costs to deliver it. Avanti said it has an ongoing cost-optimization project aimed at reducing those costs by a minimum of 15 percent annually by 2020.

Avanti said government customer growth on Hylas-4 and Hylas-3 are expected to grow bandwidth-specific revenue by 125 percent this year, and another 40 percent in 2020. Avanti signed a seven-year distribution agreement with U.S. service provider Comsat in August, gaining access to U.S. government customers. In September Avanti said it was establishing an office in Washington to focus solely on selling satellite capacity to the U.S. government and related agencies.

Hylas-3 is a 9 gigabits-per-second payload with steerable Ka-band beams included on Airbus and the European Space Agency’s European Data Relay Satellite C. The satellite, supplied by OHB, was originally expected to launch in 2015, but ran into manufacturing delays.

Once in orbit, Hylas-3 will join Avanti’s fleet of three Ka-band satellites covering Africa, the Middle East and Europe.