SATELLITE company Avanti yesterday raised £282m through a combination of shares and debt facilities to fund growth in providing broadband to inaccessible markets.
The company, which sells broadband using satellite technology to remote and rural locations, will use the money to launch its second satellite in 2012.
Avanti current rents space on other satellites, and its first vessel, Hylas 1, is due to launch early next year.
Chief executive David Williams said its second satellite would help the company extend coverage in the UK and Europe, but would also boost growth in the Middle East and Africa.
“This second satellite gives us capacity that is three times the size we currently have. It gives us more coverage in Europe and further east in to the Caucasus, across the Gulf as far as Afghanistan and down the eastern side of Africa,” he said. “It was a dreadful time on the markets to price a share placing but our shareholders have been very supportive of us because we are an unusual business and this is a very exciting time of growth for us.”
Avanti believes it has a potential market of 100m homes and businesses that are out of reach of fixed-line broadband.
The share placing was carried out by Cenkos Securities at 400p, a seven per cent discount to Friday’s closing price of 431.5p.
As well as the share placing, Avanti also secured debt facilities worth £194m from the US Export-Import Bank and the French export credit agency, Coface. The Hylas 2 is being built by the US company, Orbital and is being launched using the French business, Arianespace.
Yesterday’s share placing was the second Cenkos Securities has carried out for Avanti since it became broker to the company in March 2008. Julian Morse and his small cap team led the deal for the boutique broker that was set up by Collins Stewart founder Andrew Stewart five years ago and is building a solid reputation in the investment banking scene.
Cenkos has a number of clients in the telecoms sector, but it was its experience in mid to small cap fund raising that really won the day. Morse’s team has worked together for 16 years, joining Cenkos four years ago from Beeson Gregory. He says their experience meant they could find money where other brokers struggled in what was a difficult market for share placings. “The fundraising market is difficult but if you have the right product, there are always funds available. You also have to know where to go to look for it,” Morse told CityA.M. “It is going to remain difficult in 2010 as investors are being very choosy about where they put their money, but quality share issues will succeed,” he said.