TIDMVN 
 
RNS Number : 4358E 
Avanti Communications Group Plc 
21 December 2009 
 
? 
 
 
Date: 21 December 2009 
On behalf of:      Avanti Communications Group plc ("Avanti", "the Group" or 
"the Company") 
Embargoed until:0700hrs 
 
 
 
 
Avanti Communications Group plc 
  *  Placing of GBP86m plus GBP194m Debt Facilities to Fund Proposed HYLAS 2 
  satellite launch 
 
 
 
Highlights 
  *  GBP86 MILLION RAISED THROUGH NEW AND EXISTING INSTITUTIONAL INVESTORS 
  *  GBP194 MILLION DEBT FACILITIES TO BE PROVIDED OR GUARANTEED BY US AND FRENCH 
  EXPORT CREDIT AGENCIES AT RATES BELOW 6% 
  *  SECOND SATELLITE TO LAUNCH IN 2012 TO PROVIDE KA BAND BROADBAND SERVICES IN 
  EUROPE MIDDLE EAST AND AFRICA 
 
 
 
Background and details of the Placing 
 
 
Avanti Communications Group plc (AIM: AVN), ("Avanti" or "the Company"), the 
broadband satellite operator, is pleased to announce a placing ("Placing") of 
21,500,000 new ordinary shares of 1p each in the Company ("Placing Shares") to 
be carried out by Cenkos Securities plc ("Cenkos") with new and existing 
institutional investors at a placing price of 400p per ordinary share of 1p each 
in the Company ("Ordinary Shares"). The Placing, which is conditional, inter 
alia, upon shareholder approval at a General Meeting to be held on 6 January 
2010, will raise GBP86 million (before expenses) to fund the procurement, launch 
and operation of its second satellite, called HYLAS 2. 
 
 
The placing proceeds will complement debt facilities amounting to GBP194m in 
aggregate to be provided by The Export-Import Bank of the United States ("Ex-Im 
Bank") and COFACE (acting as a guarantor), respectively the export credit 
agencies ("ECAs") of the United States of America and France (the "Debt 
Facilities"). The ECAs will make debt available in support of their own national 
manufacturers - Avanti will procure the HYLAS 2 satellite from Orbital Sciences 
Corporation ("Orbital") of the USA and will purchase a Launch Service from 
Arianespace of France. The HYLAS 2 satellite is planned to launch in the first 
half of 2012. 
 
 
HYLAS 1, Avanti's first satellite scheduled for launch in Q2 2010, will be the 
first superfast broadband satellite launched in Europe. HYLAS 2 will duplicate 
HYLAS 1 coverage over Europe, and will give Avanti a market advantage in being 
the only company in Europe to offer resilient, dual redundant Ka band coverage 
to its customers. It will also provide Avanti's existing European service 
provider customers with more capacity when HYLAS 1 is full. HYLAS 2 will also 
add new coverage in Eastern Europe, the Middle East and parts of Eastern and 
Southern Africa. These new markets are expected to offer strong demand at 
attractive pricing given the relative shortages of high quality terrestrial 
infrastructure. The HYLAS 2 satellite has the flexibility to move power between 
Europe and the newer markets to mitigate any fluctuations in market appeal and 
targeting markets with the highest return. 
 
 
Avanti's assessment of the overall market in EMEA suggests that there is demand 
for at least 100 million satellite broadband installations. HYLAS 2 offers 8,280 
MHz of capacity, versus the 3,000 MHz of HYLAS 1. It will have the capacity to 
serve up to 1 million broadband customers, in addition to the 350,000 which can 
be served by HYLAS 1. 
 
 
The Placing Shares will represent approximately 48% of the enlarged share 
capital of the Company. 
 
 
John Brackenbury and Alan Foster, Directors of the Company, have subscribed for 
16,000 and 20,000 Placing Shares respectively. Upon completion of the Placing 
John Brackenbury will be interested in 442,891 ordinary shares representing 
0.67% of the enlarged issued share capital and Alan Foster will be interested in 
359,639 ordinary shares representing 0.54% of the enlarged issued share capital. 
 
 
M&G Limited, which owns existing Ordinary Shares in the capital of the Company 
representing approximately 11.8% of its issued share capital, has committed to 
subscribe for 4,668,350 Placing Shares under the Placing. The commitment in 
relation to the Placing by M&G Limited constitutes a related party transaction 
under the AIM Rules. The Directors of the Company consider, having consulted 
with Cenkos, its Nominated Adviser and Broker for the purposes of the AIM Rules, 
that the terms of the transaction with M&G Limited are fair and reasonable 
insofar as the Company's shareholders are concerned. 
 
 
Application has been made to the London Stock Exchange for the Placing Shares to 
be admitted to trading on AIM. It is expected that Admission will become 
effective and that dealings in the Placing Shares will commence on AIM at 8.00 
a.m. on 7 January 2010. 
 
 
Debt Facilities 
 
 
Under the proposed terms of the Debt Facilities, Ex-Im Bank will be a direct 
lender to Avanti, and has signed a Facility Agreement. COFACE operates 
differently, providing a guarantee to a commercial bank which then becomes the 
lender of record. COFACE has provided an offer of guarantee which is open for 
acceptance until March 2010 and Avanti is working with a commercial bank to 
complete the necessary debt facility documentation. The terms of the two 
facilities, both of which are US dollar denominated, are substantially the same. 
Subject to the completion of a facility agreement with COFACE and then 
achievement of certain typical milestones and conditions precedent relating to 
both facilities, the Debt Facilities can be drawn down during construction and 
are then repaid over a seven year period with a total maturity of 10 years. The 
facilities bear an aggregate annualised interest rate including upfront fees and 
recurring annual rates of below 6%. 
 
 
David Williams, Chief Executive of Avanti, said: 
 
 
"I am delighted to announce the financing of HYLAS 2, which has been made in a 
manner which is highly efficient for shareholders.  With this second satellite, 
we achieve three important objectives. Firstly we diversify our risks by launch, 
satellite manufacturer and geography, meaning that Avanti is a lower risk 
company. Secondly we can provide in orbit resilience and redundancy, an 
important factor in the maturity of our offer to larger customers. Finally we 
gain access to some exciting high growth markets whilst also providing existing 
customers in Europe with further capacity once HYLAS 1 is filled. HYLAS 2 is a 
much larger satellite and therefore greatly increases our revenue and profit 
potential. With equity dilution of less than 50%, we gain additional satellite 
revenue generating capacity of 275%. 
 
 
"It is clear to Avanti that the market for Ka band broadband services is growing 
at a much higher rate than originally anticipated. This project enables us to 
secure our position as a world leader in satellite broadband and one of the only 
companies with more than one Ka band satellite. 
 
 
"I am very grateful to Ex-Im Bank and COFACE and to our main suppliers Orbital 
and Arianespace for their support of this ground breaking transaction. It will 
have a transformational impact on profit potential, makes Avanti a lower risk 
and stronger company and gives us great confidence in the next phase of our 
growth." 
 
 
Enquiries to: 
 
 
 
 
+-----------------------------------------+---------------------------------------+ 
| Avanti Communications Group plc         | http://www.avanti-communications.com  | 
+-----------------------------------------+---------------------------------------+ 
| David Williams                          | 020 7749 1600                         | 
+-----------------------------------------+---------------------------------------+ 
|                                         |                                       | 
+-----------------------------------------+---------------------------------------+ 
| Redleaf Communications Ltd              | avanti@redleafpr.com                  | 
+-----------------------------------------+---------------------------------------+ 
| Wendy Watherston / Paul Dulieu          | 020 7566 6700                         | 
+-----------------------------------------+---------------------------------------+ 
|                                         |                                       | 
+-----------------------------------------+---------------------------------------+ 
| Cenkos Securities                       |                                       | 
+-----------------------------------------+---------------------------------------+ 
| Julian Morse / Ivonne Cantú             |  020 7397 8900                        | 
+-----------------------------------------+---------------------------------------+ 
 
 
 
 
Notes to Editors: 
 
 
About Avanti Communications 
?Avanti sells satellite broadband services to telecoms companies which use them 
to supply homes and 
 




     businesses. 


?Avanti's first satellite, called HYLAS1 is under construction for launch in Q2 
2010 and will be the first 
 




     superfast broadband satellite launched in 


Europe. 
?The market for 2Mb satellite broadband products in the Europe, Middle East and 
Africa markets Avanti 
 




     serves is estimated at more than 100 million 


homes and businesses. 
?Avanti currently provides satellite broadband services to customers in Europe 
using leased satellite capacity 
 




     which it will transfer to HYLAS 1 on 


launch. 
 
 
About EXIM BANK 
 
 
The Export-Import Bank of the United States is the official export credit agency 
of the United States. Ex-Im Bank's mission is to assist in financing the export 
of U.S. goods and services to international markets.Ex-Im Bank does not compete 
with private sector lenders but provides export financing products that fill 
gaps in trade financing.  Ex-Im Bank provides working capital guarantees 
(pre-export financing); export credit insurance; and loan guarantees and direct 
loans (buyer financing).  With more than 70 years of experience, Ex-Im Bank has 
supported more than $400 billion of U.S. exports, primarily to developing 
markets worldwide. 
http://www.exim.gov 
 
 
About Orbital 
 
 
Orbital develops and manufactures small- and medium-class rockets and space 
systems for commercial, military and civil government customers. The company's 
primary products are satellites and launch vehicles, including low-Earth orbit, 
geosynchronous-Earth orbit and planetary spacecraft for communications, remote 
sensing, scientific and defense missions; human-rated space systems for 
Earth-orbit, lunar and other missions; ground- and air-launched rockets that 
deliver satellites into orbit; and missile defense systems that are used as 
interceptor and target vehicles. Orbital also provides satellite subsystems and 
space-related technical services to government agencies and laboratories. More 
information about Orbital can be found at http://www.orbital.com. 
 
 
About Arianespace 
 
 
Arianespace is the world's leading launch Service & Solutions company, 
delivering innovative offer to its customers since 1980. Backed by its 23 
shareholders and the European Space Agency, Arianespace proposes an unrivalled 
launcher family, comprising Ariane 5, Soyuz and Vega, and an international 
workforce renowned for their culture of commitment and excellence. As of 
18 December 2009, Arianespace had launched a total of 277 payloads, including 
more than half of all the commercial satellites now in service worldwide. It has 
a backlog of 25 Ariane 5 and 10 Soyuz launches, equal to 3 years of business. 
www.arianespace.com 
 
 
About Coface 
 
 
Coface's mission is to facilitate global business-to-business trade by offering 
its 130.000 customers four business lines to fully or partly outsource trade 
relationship management and to finance and protect their receivables: credit 
insurance, factoring, ratings and business information and receivables 
management. Thanks to the worldwide local service delivered by 6,700 staff in 67 
countries, over 45% of the world's 500 largest corporate groups are already 
customers of Coface. 
 
Coface is a subsidiary of Natixis whose share capital (Tier 1) was 13.4 billion 
euros end June 2009. 
www.coface.com 
 
 
Legal Notice 
 
 
Cenkos Securities plc ("Cenkos"), which is authorised and regulated in the 
United Kingdom by the FSA, is acting for the Company as Nominated Adviser and 
Broker for the purposes of the AIM Rules in connection with the Placing and will 
not be responsible to anyone other than the Company for providing the 
protections afforded to customers of Cenkos or for providing advice in relation 
to the Placing and the other arrangements described in this announcement. 
 
 
The release, publication or distribution of this announcement in certain 
jurisdictions may be restricted by law and therefore persons in such 
jurisdictions into which this announcement is released, published or distributed 
should inform themselves about and observe such restrictions. 
 
 
This announcement is not an invitation nor is it intended to be an inducement to 
engage in investment activity for the purpose of section 21 of FSMA. The Placing 
Shares are in any event being placed only with (i) persons who have professional 
experience in matters relating to investments and who are investment 
professionals within the meaning of Article 19(5) of the Financial Services and 
Markets Act 2000 (Financial Promotion) Order 2005 of the United Kingdom (the 
"Financial Promotion Order") or (ii) persons who fall within Article 49(2)(a) to 
(d) ("high net worth companies, unincorporated associations etc.") of the 
Financial Promotion Order (all such persons together being referred to as 
"relevant persons"). Any investment or investment activity to which this 
announcement relates is available only to relevant persons and will be engaged 
in only with relevant persons. Anyone other than a relevant person must not rely 
on this announcement. 
 
 
The Placing Shares have not been, and nor will they be, registered under the 
United States Securities Act of 1933 as amended (the "Securities Act") or 
qualified for sale under the laws of any state of the United States or under the 
applicable laws of any of Canada, Australia, the Republic of South Africa, the 
Republic of Ireland or Japan and, subject to certain exceptions, may not be 
offered or sold in the United States or to, or for the account or benefit of, US 
persons (as such term is defined in Regulation S under the Securities Act) or to 
any national or resident of Canada, Australia, the Republic of South Africa, the 
Republic of Ireland or Japan. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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