Spacecom Satellite Communications Ltd. (TASE:SCC), controlled by Shaul Elovitch, has lost contact with the Amos 5 satellite, which has caused a hiatus in service to customers, mainly in African countries. According to the company's notification to the Tel Aviv Stock Exchange, contact with the Russian-built satellite was lost at 06:45 on Saturday, Israel time.
Spacecom has a market cap of NIS 1.1 billion on the Tel Aviv Stock Exchange. According to its second quarter financial statements, the orders backlog for the satellite was $136 million. The satellite is recorded in Spacecom's books at $153 million. In the first six months of the year, Spacecom had revenue of $54 million and posted a loss of $1.4 million.
Loss of contact with Amos 5 means the loss of about a third of Spacecom's revenue. The Amos 6 satellite, for which Spacecom has already signed a $1 billion contract with Facebook, is due to be launched only in February next year. Capital market sources estimate that it will take about three years to launch a replacement satellite for Amos 5.
"The company shrank by a third this morning," a market source said. Spacecom's share price is indeed currently down by about 30% on the Tel Aviv Stock Exchange.
The Amos 5 satellite is insured to a value of $158 million, and Spacecom stresses that even if the satellite fails completely, the effect on its shareholders' equity will be "negligible".
Amos 5 was launched from a site in Kazakhstan in 2011, and even before its launch the company signed a five-year contract for satellite communications in Africa worth nearly $28 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2015
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