SES exercised its call option and offered to acquire the remaining shares and warrants of O3b Networks, bringing its ownership stake from 49% to 100%.
Specifically, SES will pay US$730 million to directly increase its fully diluted ownership of O3b from 49.1% to 100%, using proceeds from the company’s recent equity raising. On completion, SES will consolidate USD$1.2 billion of O3b net debt and will, following completion, refinance a significant proportion of the most expensive debt facilities, using the proceeds secured by the recent hybrid bond issuance and the remaining proceeds from the equity raising. This will significantly reduce O3b average cost of debt of 9.5%, noting that SES's current average cost of financing is approximately 4%.
SES said O3b’s unique and global high throughput, low latency solution expands its own global reach and satellite-enabled solutions.
Karim Michel Sabbagh, President and CEO of SES, commented: “Moving to 100% of O3b will be highly accretive for SES, both from a strategic and economic standpoint. In addition to exceeding SES’s investment hurdle rates, full consolidation accelerates the delivery of important transformational and combinational synergies that are only possible with 100% ownership.”
O3b began full commercial operations in September 2014. The company said it now supports connectivity for more than 40 customers worldwide, with more than 50% of those customers having already upgraded their service commitments to O3b during the first year of commercial operation.
“This is an incredibly exciting time for O3b and its customers. Our constellation is highly scalable and can be grown in direct response to market demand. In only a little over a year from our full commercial launch, we can already see the need for substantially more capacity in orbit to serve our customers. We are the No.1 operator in the Pacific and, together with Royal Caribbean, we have revolutionized the cruise connectivity market. Our Telco customers are expanding their service offerings and growing their markets on the back of O3b’s performance and capability,” said Steve Collar, CEO of O3b Networks.
- O3b Networks’ investors include SES, Google, Liberty Global, HSBC Principal Investments, Northbridge Venture Partners, Allen & Company, Development Bank of Southern Africa, Sofina, Satya Capital and Luxempart. O3b Networks is headquartered in St. Helier, Jersey, Channel Islands.
SES-9 is SES’s largest satellite to serve the Asia-Pacific region. It weighed 5.3 tonnes at the launch and has 57 high-power Ku-band transponders – equivalent to 81x36 MHz transponders’ It thus provides significant expansion capacity to serve the buoyant and fast-growing video, enterprise, mobility and government sectors across Northeast Asia, South Asia, India, Indonesia and the Philippines.
Boeing was lead contractor.
In addition, SES-9 is equipped with dedicated mobility beams to provide maritime coverage vessels on high-traffic maritime routes between the Suez Canal and Strait of Malacca.
The Falcon 9 rocket attempted to land on a drone ship in the Atlantic, but missed narrowly.
The deal will enable Gogo to address the growing demand for high-speed inflight connectivity on travel routes over North America, including Alaska, Hawaii, Mexico and Canada, as well as Central America and the Caribbean. Gogo will also have access to HTS capacity on an additional satellite, SES-12, which is set to be launched in 2017 with high-powered spot beam and wide beam coverage over Asia, the Middle East, North Africa and Russia.