Spacecom Postpones Deal With California-Based Satellite Manufacturer Loral
According to the original agreement announced in March, the deal should have become void when Spacecom failed to pay the down payment within 60 days
Israel-based satellite operator Space Communication Ltd. has postponed its $112 million contract with Palo Alto, California-based Space Systems/Loral LLC for the construction of its latest satellite, AMOS-8. In a filing with the Tel Aviv Stock Exchange on Sunday, the company, also known as Spacecom, announced it has come to an agreement with Loral to postpone its first down payment by 30 days.In May, the company announced it has signed a four-year, $55 million deal to provide an unnamed non-Israeli communications company with satellite services.
According to the original agreement announced on March 25, the deal should have become void when Spacecom failed to pay within 60 days, meaning by Friday. Under the terms of the contract, Loral is to deliver the finished satellite within 27 months of the first payment, and provide support for as long as it remains in orbit.
The AMOS-6 explosion in 2016. Photo: EPA
AMOS-8 is intended to replace AMOS-7, which has been leased by Spacecom for four years following the destruction of a previous satellite, AMOS-6, in a pre-launch explosion in 2016. As a result of the accident, Spacecom lost a $95 million deal with Facebook and a planned $285 million acquisition by Shanghai-listed telecommunications technologies supplier Beijing Xinwei Technology Group Ltd.
In April, lacking the necessary funds to complete the AMOS-8 deal, Spacecom announced a plan to raise $110 million in bond options and collateral bonds. $50 million of that sum is meant to finance AMOS-8.
Later that month, Spacecom announced it has received a letter from a government official, informing the company that the state intends to “work towards placing a satellite by Israel Aerospace Industries Ltd. (IAI),” a state-owned company, at the geostationary position intended for AMOS-8. Israel owns the position.
Spacecom is a subsidiary of holding company Eurocom Group, the controlling stakeholder of Israel’s largest telecommunications provider Bezeq. Eurocom, its subsidiaries and its co-owner Shaul Elovitch are facing a debt of hundreds of millions of dollars, and the future of the company is currently at the hands of creditors.