Assisting O3b Networks to secure USD460 million for eight satellites

The problem

O3b Networks launched a range of high-throughput satellite services using an innovative fleet of 12 satellites in medium-Earth orbit (MEO) in 2014. After operating successfully for around a year, O3b wished to secure further debt financing from its existing lenders to purchase eight more satellites. Analysys Mason was selected by ING Bank, acting on behalf of the lenders, to review O3b's market and revenue projections and assess whether there was sufficient demand to justify purchasing more satellites.

The solution

We analysed demand region by region for O3b's five principal lines of business: trunking, mobile backhaul, government services, services for the energy sector and maritime services taking account of O3b's backlog and pipeline in each area, the likely evolution of demand and competitive dynamics. Based on this we gave our opinion on the robustness of O3b's revenue forecasts by region and line of business. We presented our findings to O3b and the lenders and answered a number of specific concerns raised by individual lenders.

The result

Our assessment of O3b's prospects was instrumental in enabling the company to close USD460 million in incremental debt and equity financing in December 2015 to finance the purchase of eight more satellites which are being built by Thales Alenia Space for delivery starting in late 2017.