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Avanti Communications buyer talks continue

Published: 07:52 16 Sep 2016 BST

Satellite solutions
Avanti warned in July that it would need to raise at least US$50mln

Avanti Communications Group PLC (LON:AVN) said it was continuing discussions with potential buyers after a strategic review of its business plan and financial position.

It announced a two-phase funding strategy Friday morning in order to address a “short term liquidity need”.

Avanti warned in July that it would need to raise at least US$50mln after cutting revenue targets.

The group said it had also commenced work on an as yet undisclosed long term funding solution, forming the second phase of funding.

In the statement, Avanti said it was still open to exploring a merger and acquisition transaction and would be updating shareholders in due course.

“Upon the completion of due diligence by interested parties, the board intends to request best and final indicative offers for a potential acquisition or any strategic investment in the company. There is, however, no certainty that a satisfactory offer or other strategic transaction will be forthcoming,” said Avanti.

Analysts have long marked Avanti as a possible takeover target for larger satellite group Inmarsat (LON:ISAT).

In July however, the group poured cold water on the rumours and said it had no plans to buy its struggling rival.

Inmarsat announced Friday that it had raised US$400mln through a senior loan notes offering, adding to proceeds of over US$1bln that will be used to “support its existing strategy of continued investment in innovation”.

Avanti also won a contract to provide affordable satellite broadband connectivity to 1,400 community sites across Sub-Saharan Africa over the next two years using Avanti's newly launched ECO Wi-Fi hotspot initiative.

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