Pytheas Cyprus Takes Majority Stake in Mobile Terminal Provider

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  Space News Business

Pytheas Cyprus Takes Majority Stake in Mobile Terminal Provider

By PETER B. de SELDING
Space News Staff Writer
posted: 12 November 2008
02:42 pm ET






PARIS
— A Cypriot investment company is buying a large equity stake in a builder of Inmarsat and Thuraya mobile satellite terminals, saying satellite communications is “a relatively good defense against recession.” Pytheas Cyprus Ltd. is paying up to 94.96 million
Singapore
dollars ($64 million) in cash for a majority stake in Addvalue Technologies Ltd. of
Singapore
.

Addvalue
announced separately Nov. 5 that it is in advanced negotiations with “a foreign company for a possible acquisition” but said the transaction had yet to be completed. Pytheas said its investment in Addvalue should facilitate further acquisitions.

Addvalue
builds mobile terminals for use with London-based Inmarsat’s BGAN broadband service, which recently has gone global with the launch of the third and final Inmarsat 4 satellite. Addvalue also provides terminals for United Arab Emirates-based Thuraya, which competes with Inmarsat and has specialized in hand-held satellite telephones.

Addvalue
reported 10.7 million
Singapore
dollars in revenue for its last fiscal year, ending March
31, a
71 percent increase over the previous year. Net profit was 2.18 million
Singapore
dollars, compared to 138,000
Singapore
dollars a year earlier.

Pytheas
will make an initial investment of 37.95 million
Singapore
dollars for a 29.92 percent stake in the company. It then will have 12 months to exercise a call option to increase its stake to 51.56 percent with the payment of 56.65 million
Singapore
dollars.

In a Nov. 3 statement, Pytheas‘ controlling shareholder, Harris A. Samaras, said his company believes satellite communications is a safe investment at a time of global financial upheaval.

“We recognize the immense growth potential in the global satellite industry, particularly in the high-growth regions of the Middle East, Central and Eastern Europe, South America and Africa, fueled by progressively more attractive airtime rates and expanded functionality of products and solutions,” Samaras said in his statement.

“Satellite products, apart from enjoying a longer life cycle relative to consumer products, also provide a relatively good defense against recession, an impending scenario facing the world right now, as demand tends to be relatively downward-inelastic,” Samaras said. “This is why we have continued to pursue this strategic partnership, despite the current economic turmoil.”

Samaras said Addvalue has good potential for organic growth but that “it is also the right time for the company to further strengthen and expand its network, products and services through mergers and acquisitions.”

In a Nov. 5 statement, Addvalue Chief Executive Chan KumLok Colin said the company, whose stock is traded on the Singapore exchange, “is indeed at an advanced stage of discussion currently with a foreign company for a possible acquisition” but that there is no guarantee that the deal will be concluded.

Chan said the Pytheas investment will permit Addvalue “to accelerate the supply of its range of maritime terminals currently under development to incorporate safety and security features in meeting the Long Range Identification Tracking (LRIT) requirement [of] the International Maritime Organization and many national maritime authorities for a wider range of vessels in the coming years.”

In a Nov. 3 investor presentation, Addvalue said the broadband mobile satellite communications market is expected to grow by more than 25 percent per year through 2015, when measured in the number of subscribers, to around 115,000 from around 30,000 today.

Hand-held satellite telephones, a market that has been core to Thuraya and that Inmarsat is just now entering, is expected to grow by 11 percent per year in the 10 years ending 2014, the company said. Addvalue used market forecasts provided by Stratos Global of Bethesda, Md., a major Inmarsat services distributor that, in April, is expected to be taken over by Inmarsat.