The prolonged debt settlement saga in Spacecom (Space Communication, TASE: SCC), which operates the Amos satellites, has entered a new chapter. This time, it is Israel Aerospace Industries (IAI) that seeks to take over the company. Spacecom, headed by Dan Dan Zajicek, announced this morning that it had received an approach from IAI and Phoenix Underwriting with a plan for rescheduling its debt, which will reach $378 million in three series of bonds at the end of June.
Spacecom has cash estimated at $210 million, which makes a debt settlement necessary. Phoenix Underwriting stated that in view of the new proposal, it was withdrawing a previous proposal submitted together with Apex Issuances.
Spacecom has been in a debt settlement process for over two years. So far, the creditors’ representative has not reached an agreed arrangement for repayment of the debt in a way that will enable the company’s activity to continue. The new proposal includes IAI taking a strategic stake in Spacecom that will give it control of the company once the debt settlement is completed. IAI and Phoenix Underwriting say that the plan “will contribute substantially both to the company and to the creditors in the certainty that it will provide for completion of the settlement.”
IAI points out that it has relevant experience. In 2012 Spacecom bought a satellite from it (Amos 6) for $200 million. In 2016, it bought a satellite from Boeing (Amos 17). Friction arose between the two companies when in 2018 Spacecom approached another foreign company to build a satellite for it, which drew criticism from IAI.
The current debt settlement offer, which would turn IAI into the controlling shareholder in Spacecom, would bring things full circle in that respect. It would also make obtaining the necessary regulatory approvals for a takeover of Spacecom, which has proved an obstacle in the past few years, relatively easy. State-owned IAI says that it will be able to obtain these approvals “with a very high degree of probability and within a fairly short time.”
The new proposal is for the issue of a $155 million, secured by a first lien on all of Spacecom’s satellites, which would give a ratio of debt to collateral of 68%. The net proceeds of the bond will be used to pay Spacecom’s existing bondholders, or they will be issued new bonds.
Spacecom will be left with $20 million cash to finance its day-to-day activity. The bondholders will receive the rest of Spacecom’s cash, such that, together with the proceeds of the new bond offering, they will receive $345 million, against debt of $378 million, as mentioned.
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Spacecom’s share price jumped 21% today to a price that still gives the company a market cap of only NIS 16 million. The company’s bonds are traded a junk yields to redemption of 32-52%.
Published by Globes, Israel business news – en.globes.co.il – on May 15, 2025.
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