It appears that the primary market is still not ready to cope with large-scale issues, which makes this morning’s press reports on NetVision’s planned giant issue ($60 million) a bit far-fetched.
The issue of satellite communications company Spacecom is case in point. The institutional tender, in which underwriter IBI was supposed to market half the target sum of NIS 226 (shares, straight bonds and convertible bonds). It turned out, however, that institutional investors did not exactly snap up the offering, dubbed NASA Israel.
In view of the institutional tender’s lack of success, Spacecom owners and underwriters are currently meeting to review the issue. “Globes” has learnt that one of the scenarios on the agenda involved rolling back the issue and modifying its structure.
Spacecom, which holds an exclusive Israel Aircraft Industries (IAI) concession to market communications satellite Amos 1’s space segments, is expected to launch satellite Amos 2 in the first half of 2001. The company signed a contract for acquiring Amos 2 from IAI for $130 million.
Amos 2 is expected to operate 11 years, and have 22 active space segments, compared to Amos 1’s 14. Amos 2’s business plan forecasts assured annual income of $24 million until 2007, scheduled to rise to $36 million starting from 2008. The satellite’s lifetime sales potential is $460 million, and it will require a $180 million investment. DBS company YES is expected to be Amos 2’s principal customer, generating assured revenues of $208 million for Spacecom.
Published by Israel's Business Arena on 18 September, 2000