Commercial GEO satellite operator SES is increasing its stake in O3b Networks, the satellite constellation operator, to a controlling 50.5 per cent from its current 49.1 per cent. It has agreed to pay US$20 million for the 1.4 per cent shareholding, which values the whole company at about US$1.4 billion.
O3b, whose innovative MEO 12-satellite constellation (built by Thales Alenia Space) has been active since 2015, carries debt of US$1.2bn which SES intends to consolidate and refinance.
Karim Michael Sabbagh, SES president and CEO, said: “O3b delivers a unique capability and solution, which is already in operation, for Enterprise, Mobility and Government clients, particularly for applications where low latency is an increasingly essential feature.”
SES expects O3b to generate revenue of more than US$100 million in 2016, nearly doubling that recorded in 2015.
At ‘steady-state’ utilisation, which is targeted to be achieved by the end of the third year of a satellite’s commercial service, the full operational constellation is expected to generate annualised revenue of between US$32m and US$36m per satellite, according to SES.
O3b is considering an Initial Public Offering (IPO) for the remaining 49.5 per cent of the shares. If the IPO does not take place, SES has a call option to acquire the outstanding shares for a baseline sum of US$710 million, adjusted for an interest charge. If neither of these happen by October 2017, other shareholders in O3b have a put option to oblige SES to acquire the shares at the same price.