TYBEE ISLAND, Georgia — Satellite fleet operator Avanti Communications Group of London on Aug. 18 closed a combined debt and equity financing deal that netted $136.3 million, which the company said completes the financing of its Hylas 4 satellite.
Hylas 4, under construction by Orbital ATK of Dulles, Virginia, is a Ka-band broadband satellite with 28 gigahertz of throughput capacity targeted at European, Middle Eastern and African markets. It is scheduled for launch in early 2017 aboard a European Ariane 5 rocket.
In a statement issued to London’s AIM stock exchange, Avanti said MAST Capital Management LLC of Boston purchased $125 million in Avanti bonds, due in 2019, with a 10 percent annual interest rate.
As part of the transaction, MAST had asked to purchase Avanti equity as well, the satellite operator said. The new shares, issued at a 4 percent discount to where they traded, resulted in $11.3 million of net proceeds to Avanti.
Avanti said it has no immediate need for cash to pay Hylas 4 capital costs, but that raising the funds now will mean avoiding an interest rate increase on existing debt that would have occurred in September without the additional funding.
The company said the latest financing round did not include restrictions on the company’s use of cash that might have been attached to lower-yield debt. “The great advantage of high-yield bonds is that there are no financial or ration covenant tests the company must meet,” Avanti said.
Avanti said the new debt and share issue brings the company’s total financing to a balance of 57 percent debt and 43 percent equity.
MAST Capital Management Portfolio Manager Peter Reed said MAST has “long admired Avanti’s business and management team. The completion of the financing for the Hylas 4 satellite is an exciting and important milestone for the company.”
