Ministry mulls allowing Hungary’s 4iG to buy 20% of Spacecom

2022-08-02 11:48:10

Spacecom (Space Communication Ltd – TASE: SCC) has notified the Tel Aviv Stock Exchange that the Ministry of Communications is considering allowing it to sell 20% of its shares to Hungarian company 4iG, in a deal that will include an option for 4iG to acquire control (51%) of Spacecom in the future, subject to the ministry’s approval.

Spacecom says that 4iG has not yet agreed to proceed in accordance with the outline deal presented to the Ministry of Communications, and that it has not been approved by the company’s board of directors. Following the report, Spacecom’s market cap has risen to over NIS 100 million.

Last October, Spacecom and 4iG agreed that the latter would inject NIS 221 million ($69 million) into the former in return for a 51% stake. The requisite approval for the deal has, however, not yet been obtained from the Ministry of Communications, as far as is known because of objections on security grounds. Now, another plan is being promoted that is meant to allow the Hungarian company to take an initial stake that does not give control of Sapcecom.

The Ministry of Communications is demanding that before it approves the current proposal, a binding agreement should be signed between Spacecom and “an Israeli government user”, specifying the use of certain satellites and points in space. So far, despite the delay in obtaining approval from the Israeli regulator, the agreement between Spacecom and 4iG has not been cancelled.

Last year, Spacecom’s revenue rose 6.7% to $93.7 million, thanks to a rise in income from the Amos 17 satellite. The Amos 3, Amos 4 and Amos 7 satellites are operating a near full capacity, while usage of the new, advanced Amos 17 satellite has been growing gradually, reaching 38% of capacity at the end of 2021.

Spacecom posted an operating profit of $14.2 million in 2021, which compares with an operating loss of $3.8 million in 2020. The company’s net loss narrowed last year by 56.4% to $15.4 million.

At the end of 2021, Spacecom owed NIS 1.2 billion ($382 million) to its bondholders, and it published a cash flow forecast indicating that it would need to raise capital of $60 million.

Published by Globes, Israel business news – – on August 2, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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Written by Jitendra Singh

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