Spacecom Satellite Communications Ltd. (TASE:SCC) today announced that fuel on its interim Amos 5i communications satellite will run out before the Amos 5 satellite is launched. The company will report a $12 million loss in 2010-11 as a consequence on accelerated depreciation on the satellite and loss of profits.
The Amos 5i satellite was supposed to provide communications coverage of Africa until the Amos 5 becomes operational in mid-2011. The higher than expected usage of fuel means that the Amos 5i will not be able to provide continuous coverage for Spacecom's customers.
Spacecom said that it is seeking alternatives together with its customers to ensure continuous coverage until the Amos 5 becomes operational.
In contrast to the rest of Spacecom's Amos 5 communications satellites, which the company designs and launches itself, the Amos 5i was purchased from Asia Satellite Telecommunications Company (HKSE: 1135), which operated the satellite as the AsiaSat2. The Amos 5i is a 15-year old communications satellite, and was due to end its operational life in 2012.
Spacecom bought the Amos 5i from its own equity, reportedly for $45 million.
Shaul Elovitch's Eurocom Group owns 65.9% of Spacecom. Spacecom's share price fell 6.1% to NIS 69.50, giving a market cap of NIS 1.35 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2010
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