Avanti Communications: New Financing Arranged

On January 20, 2021 we wrote that Avanti Communications was in “financial difficulty”, based on a news report. The satellite launcher and operator has a huge debt load and a bond deadline was looming. We’ve now learned that today – February 8, 2021 – the $145 million debt (Super Senior Facility/SSF) needed to be refinanced or extended.

Apparently, the existing lenders have blinked and offered a one year extension. Here’s what “Advanced Television” – a trade publication – had to say:

In a statement on February 8th, Avanti said: “Today the Company announces that it has agreed on the headline terms of an amendment and extension of the SSF to 31 January 2022 (the “A&E Transaction”). When completed, the A&E Transaction will provide a material maturity extension of the SSF combined with a new capital injection of $30 million provided by the Company’s existing junior lenders, enabling the Company to execute on its growth plan including the closing of its exciting pipeline of significant contracts.”Avanti added: “In order to provide time to finalise (i) requisite consent processes and (ii) definitive long form documentation, the Company has agreed a short-term extension of the maturity of the SSF from 8 February 2021 to 15 February 2021“.

This news suggests that Avanti will live to fight another day but that Great Elm (GECC) and BlackRock TCP Capital (TCPC) – both of whom are junior lenders – will be anteing up more capital. Currently – using data through September 30, 2020 – the two BDCs have advanced $115mn.

There’s no change to our CCR 5 rating for Avanti (TCPC carries the debt as non performing but GECC as performing – a subject unto itself). We will learn more about both BDCs exposure to Avanti either when IVQ 2020 results are discussed. Or, if the BDCs are being coy, when IQ 2021 results are updated as this new capital seems likely to be advanced in the current quarter.