Hi Jaknife, I expect the price to go higher because I believe the current price is false. The price is either zero or a finger in the air guess until we see the market response once the dust settles. Look at this morning - the pre-market auction was decided by a trade of 1600 shares or £98.56. The first decent trade is for the modest amount of 100,000 shares, or £6,392. You can actually see quite well on the trades here because for some reason iii give a blow by blow account of the two daily auctions and we have seen the odd price monitoring notice for what are risible sums on a couple of days.
You are correct that there has been a massive debt for equity swap but I read this as a good sign. The enterprise value of the company is hardly affected and there is a possible rights issue further down the road and it will be (as usual) the big boys who make the decisions. On the one hand I would call the likes of Solus 'clever money' but you could also say they can't be that clever after losing a boat load on Avanti. It does mean however (no doubt for self interest) that the bond holders are now holding stock which aligns them with me for instance.
The extra $50 mio does concern me but they have stated what I would call the bleedin' obvious and say welcome to the real world. Even new sales successes may not be able to be recorded as cash immediately so no doubt the accountants among you can start torturing the figures. The $40mio infrequently recurring pipeline bothers me less. This is something of an accounting anomaly and doesn't appear to bother them and Nigel Fox intimated to me at the GM that it wasn't an existential threat.
The Director's buys are also encouraging. There are no guarantees here but for whatever reason the bond holders decided to keep the lights on. My best guess is that the company was worth more hanging on to the team with H4 in space rather than a fire sale. The dilution has imo already happened and we could see some good news from here on in especially after the soul baring required by the TO panel. It makes things appear far worse than they are.
Why exactly should it go higher? The company has announced a massive debt for equity swap but even after that there will be a big chunk of debt and it's not obvious that the company will be able to pay the interest on that.
Furthermore it's admitted that it will need to raise at least $50m of additional funds AND secure the extra $40m of extra revenue. If it doesn't then it has said that it will "be highly likely to be unable to pay its creditors, as and when they fall due for payment."
That points to a materially dilutive equity fund raise. And a dilutive equity raise would normally point to a share price going lower rather than higher.
I loaded up on these yesterday in a vain attempt to recoup some money on my initial investment. A return to 10p would do it. I wouldn't normally do this but there are some signs that it could go higher. I'm out at 10p.
I ummed and aahed about going as it was (to me) a rubber-stamping meeting but it is a short journey. This was confirmed and there was one other PI or possibly two. I had a chance to chat to the new CEO and a couple of others there. The bond holders stayed at home but couldn't vote on certain resolutions.
The meeting had to have a show of hands just to please the regulators and Paul Walsh after each vote said he had 89 mio odd proxies and 98/99 per cent FOR. As expected TBF.
At the launch I thought that David Bestwick was outnumbered by the Japanese contingent but was shown a video taken in the jungle where Nigel Fox and 8 larger customers had a better viewing experience. They had the full Glastonbury effect as well as screens if you wanted. I know what I would have chosen and hope the customers were satisfied.
Paul Walsh said it was the last piece of the jigsaw and the Trinity completed by a new CEO on 3 April and the launch 5 April.
There were staff members there who don't have to notify by RNS and one was a definite buyer at sub 11p. The company is now in a closed period. They were a bit surprised by Caledonia, especially as Will Wyatt was an NED until 2014. It is possible that with the dilution coming it was hardly worth holding on to a tiny percentage.
The company has spoken to Inmarsat (yesterday) but I wouldn't read too much into that as the Satellite world is small in London although there are advantages to Inmarsat using our beams apparently. I spoke to various people and suggested that we might be of interest to other companies to supplement their coverage and be bought out. I was told the company would resist any approach by bargain hunters.
I think we should get back to the OO price of .1125 pretty soon and expect news of completed sales. The new CEO comes from a sales background and has excellent contacts in the Industry and Africa.
There was an auction extension at the end of the day for trades. I don't know whether you should include the 16.31 trade but all those after are part of the auction. Could this mean that Caledonia is now finished and the price can rise?
Identified as Caledonia per yesterday's RNS. They started with 6 mio shares so there may be a little overhang next week but the bulk is done I'd imagine. On a fragile share like this all we have identified so far is that it is quite an easy share to move and it doesn't take much. Maybe Caledonia has better information than us but it does seem strange after holding this long. There are guv'nors involved in the chain of command and perhaps a shrug of the shoulders followed by a 'I haven't a clue' resulted in the fund manager being told to sell them? I haven't anyone above me and I've hidden my position from the wife so will hold until the denouement. The majority seem supportive even though it may be with clenched teeth and I expect the 25th April meeting to be a rubber stamping.
Now the dust has begun to settle and the febrile AIM punters have corrected their knee jerks maybe it is time to reflect. I took advantage of the fact that I have attended the last 3 AGM's and spoke today to one of the Avanti people I know from various conversations at them [AGMs].
The mess with the dates was an oversight (registrars?) and may have been concentrating on the small print and legalities whilst missing the bleedin' obvious. I did say that I hope individuals concerned had nothing to do with programming of Hylas 4. The main reason for all this paperwork is nervous Nomads and the Takeover Panel. He also mentioned lawyers and advisers in addition but it is the TO panel and Nomads who are yes men to the TO panel that create this need for being whiter than white. Because Solus will end up with a large percentage of equity but don't wish to buy the company they need to get a Rule 9 waiver from the panel. This means that the paperwork works almost from a 'worst case' scenario which means that insolvency rears its ugly head. Yes there is a risk of insolvency but also a chance that I may get run over by a bus tomorrow or Russia will bomb Salisbury. The word 'paranoid' was used when Nomad was mentioned.
There is nothing stopping Avanti personnel from buying or selling stock because (apparently) everything is out there and transparency is the order of the day. The 3 biggest bond holders are on the board and another in the US has indicated they will fall into step. I asked about M&G (equity) and they don't really have an option to break ranks anyway as they wanted the debt for equity deal (or were signed up to it).
My contact was mystified at the share movements and we both guessed it was the 'insolvency' word. The amounts are tiny in the scheme of things and the share price was in the doldrums whilst trading was desultory before. Any aggressive buying or selling in this case is likely to get momentum. My guess is that sellers got first mover advantage and will take profits quickly before the meeting on 25th (I may attend). I expect the share to move back to the .11225 figure and maybe higher. The bond holders have nothing to gain from starving the company of near term funds imo.
I am happy with the explanations I got which if you think about it, we already knew!
We've known for some time that the share price has been a wet finger in the air guess. The company is either worth zero or something as a going concern. Hedge funds are notorious for their 'activism' which is always self-serving. All I know is that for a modest sum the stock price can be manipulated daily. Directors wishing to avoid claims of negligence follow the rules and let the market know when solvency is at risk. I cannot imagine Paul Walsh wishing to be associated with any illegal chicanery and the RNS was probably held back until after the launch. It is not a surprise. At this time I have no idea what will happen but a gut feeling that this is regulatory and whatever happens there is some value here. If the worst happens there will not be enough to leave shareholders anything after dismemberment. We'll know by the end of the month.
judging by this mornings announcement that the long drawn out JV between Viasat and EUTELSAT for Africa is dead, I would say Avanti is about to sell A LOT to Vista, possibly the entire company. One of Avanti's bond holders, Tennenbaum was An owner of Wild Blue, the early US equivalent of Avanti, and they sold that to Viasat a few years ago.
Hours after the successful launch of HYLAS 4, it has been announced that the long mooted JV between EUTELSAT and Viasat has been terminated. Viasat must have an alternative strategy for getting capacity in Africa. WHAT COULD THAT POSSIBLE BE !!!!!!!!
That may well be the case terryebby and I suspect there were definitely bits that would interest ISAT but they have their own problems and perhaps the finance wasn't forthcoming. Maybe they chose to sit and wait whilst Avn expired, expecting a fire-sale forced by the bond holders. It was a close call and the story is still running.
I struggle to understand the lack of interest and low amount and number of trades as we know that AIM is a casino. I would have thought more PI's would have taken a punt. Maybe the small number of free shares has something to do with it? It certainly precludes any large selling and buying by other institutions, competitors and funds.
Next week will be interesting following a successful launch.
There is an Arianespace Launch film up which shows that th capacity goes as far as Latin America Which I dot not realise. I knew it covered North Atlantic, and that is where I think the most In Flight capacity is going to be needed. Because Avanti don't have dedicated switches in their teleports, customers can put their own in, that means that any of the IFC companies can buy capacity and add it to their global coverage. I think this is the biggest upside. On The Inmarsat thing, I spoke to one of the PR people at an event last year and he said that the Inmarsat offer was of course real and the Times writer had the salient details of the Offer, but they did not want it played out in public at a time when they were in the middle of a Bond roadshow so whenever leaked it killed a real opportunity stupidly.
Well I don't know if the potential contract is for wi-fi on planes but you do raise an interesting point. Inmarsat (ISAT) are struggling on that front and were contacted during our strategic review in July 2016 but vehemently denied that they had made an offer. In some respects I think (to paraphrase Shakespeare) 'the company doth protest too much, methinks. Avn opened a kinda data room during the review and I doubt very much that ISAT could have resisted being nosey. I don't think Rightmove cover satellite companies.
Private investors in Avn now are practically hedge funds as they [the hedge funds] decided not to wipe us out and would, if behaving to type, have future plans. I'm no expert but I think that we could fill in a few gaps on ISAT's coverage and things have changed. Apart from the industrialised countries the rest of the world struggles with cables and in space it's even harder to lay. The attempts with drones and balloons may yet come up trumps but the tried and tested satellite systems do have a certain plug in and go functionality. It will be a different game once H4 is up and running.
check out the last Trading Update. The preferred to a $40m order which is conditional. I PRESUME its conditional on the launch. If that comes through it will be their biggest order ever, and I am guessing its for Broadband on planes
a successful launch returns launch risk and manufacturing risk and schedule delays. So a fully operational bird is an attractive assets for someone who decides, say, that he needs capacity for Wifi on planes over the atlantic and canto wait three years
I can't make SP predictions but I'm guessing there is a queue of orders waiting on successful launch and HYLAS 4 being ready for service. I think it might take a couple of months before the satellite is fully operational so the reaction might also take a while.
i think the big issue has been the global recession in telecoms which have hurt a bunch of my other projects. What Avanti needs is some big demand catalyst in its custom base. I don't think the consumer is feeling richer so I doubt telco capex will be going up much this year. But a war in the Middle East is on the cards, which could hoover up vast Avanti capacity fast. I also think the In flight Communication market is going to boom. lots of planes are currently in the process of getting fitted out with satellite kit and I think as soon as 10Gb wi-fi is available on poplins, the capacity will get saturated very fast. Avanti already made one 44m sales to serve provider ion that market and I think there will be more
last thing I saw it was something like 35%. BUT Western Europe is full, there is a lot unsold in Southern and Eastern Africa.
Hylas 4 puts a lot of new capacity into Western Europe and in a bridge of steerable over the Atlantic so we have to imagine that this will sell well in existing markets also potentially in the In Flight Connectivity Market.
The rest is opening up new market ins north and West Africa - we have to hope that Nigeria, Morocco etc show some good demand. There is a LOT of military activity in Nigeria at the moment so fingers crossed
My understanding is that it's not so much the absolute capacity as where you are delivering it. Going back a few years Avanti were always talking up the African market. I guess the next few months will show whether there was anything behind the claims.
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