{"id":85656,"date":"2010-12-16T00:11:14","date_gmt":"2010-12-15T16:11:14","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/o3b-ceo-rigolle-future-plans-fully-funded-for-good\/"},"modified":"2010-12-16T00:11:14","modified_gmt":"2010-12-15T16:11:14","slug":"o3b-ceo-rigolle-future-plans-fully-funded-for-good","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/o3b-ceo-rigolle-future-plans-fully-funded-for-good\/","title":{"rendered":"O3b CEO Rigolle: Future Plans \u2018Fully Funded for Good\u2019"},"content":{"rendered":"

\"\"Operator O3b Networks<\/strong> has raised a total of $1.2 billion through a multi-layered finance deal from a group of investors and banks, including the African Development Bank<\/strong>. The deal also is covered by a guarantee from export credit agency Coface<\/strong>. The arrangement fully funds O3b\u2019s plans to launch its first satellites to provide low\u00e2\u20ac\u0090latency, fiber\u00e2\u20ac\u0090quality Internet connectivity between developing markets and the global Internet infrastructure.
\n    While O3b hoped to have gained its financing by summer, O3b CEO Mark Rigolle told Satellite News<\/em> that the company\u2019s patience paid off, allowing O3b to borrow at \u201chistorically attractive levels\u201d to put the operator on a firm footing for the future.<\/p>\n

\nVia Satellite: How important was this financing deal to your future operations?<\/h2>\n

Rigolle:<\/strong> This deal was enormously significant, as it was needed to embark on the journey of building the satellites, getting them launched and get the company going. We had done all the planning and done some sales. I think it is even more significant that we achieved full financing and not partial financing, so that there is not another round of financing that needs to be followed in another few years. This is the amount we need to get the first eight satellites launched and to start generating cash. The only possible need for further borrowing is if in the years post-launch if there is a desire driven by market demand to accelerate our growth beyond the cash flow we will be generating on the first eight satellites. If we grow at a normal pace, we are fully funded for good.<\/p>\n

\nVia Satellite: What rates did you receive?<\/h2>\n

Rigolle:<\/strong> I can\u2019t go into details about the individual tranches at this time, but what I can tell you is given current market rates, and given that the bulk of the financing is covered by a Coface guarantee, our cost of borrowing is at an historically attractive level.  <\/p>\n

\nVia Satellite: Were there ever times when you doubted that O3b would gain the financing it needed?<\/h2>\n

Rigolle: <\/strong>I am not a person to doubt. I decided to come aboard this company because I thought the financing could be done, and I thought I could contribute. Now, a key milestone has been achieved, but there is still a lot of work to be done. The financing did take slightly longer than people, including myself, expected. There were a few layers of difficulty. First, you had the whole financial market backdrop, which made it more difficult to identify pockets of capital to put in to this type of venture. When risk appetites are low, and you have a project that is not going to generate one penny of cashflow for the next two to two-and-a-half years, it\u2019s going to be more difficult to fund than a project already generating cash. The second layer of difficulty was the fact we wanted to be fully funded. What we are announcing today is that we are fully funded across the different segments of financing and have raised $1.2 billion which will carry us through to service launch.<\/p>\n

Via Satellite: This is described as a great financing market for established satellite companies to get financing but be tough for start-ups. Did you find this to be the case?<\/h2>\n

Rigolle:<\/strong> Any type of project finance where you are talking several years pre-cash is difficult to finance, even if it is a sector that is traditionally proven to be cash generative. But we also know there are many projects in satellite that have lost investors money. Getting this funding together without the developmental aspect, which attracted the Development Finance Institutions such as the African Development Bank as well as Coface backing would have been difficult.<\/p>\n

\nVia Satellite: What are the next steps for O3b operations?<\/h2>\n

Rigolle: <\/strong>I will now be able to focus 100 percent of my time on non-financial aspects of the business, such as building the satellites and the ground systems and enhancing the end-to-end customer experience. We also will start building an organization. To conserve cash, we have had a hiring freeze in place for more than six months which is no longer needed. On the sales side, there is product development and opportunities to tailor our products now to more specific market niches and segments.
\n   The packaging and the pricing is another element that we will be working on. We have been successful in selling capacity on a system that has been a vision or an idea. Now, we are truly a company and we are firmly on the map. The conviction in which our sales force and the SES sales force will be able to go our and sell this capacity has just increased enormously. The seriousness of which the larger institutional corporate names, such as the larger telcos, which are not yet part of our customer base, will look at us is now totally differently today than last Friday. We look forward to increasing our backlog, which is currently between $500 million to $600 million today, secured with our existing customers. We look forward to increasing that significantly and getting our annualized revenues in line with our business plan and which we have promised to our shareholders.<\/p>\n

\nVia Satellite: What would you like that backlog figure to be in 12 months?<\/h2>\n

Rigolle: <\/strong>My view of success is that we will be close to sold out by the time we launch. I am not so much worried about how much gets sold in the next 12 months, as it makes sense to hold back capacity until closer to launch so we can optimize what we are trying to achieve.<\/p>\n

\nVia Satellite: You have already announced contracts with Thales Alenia Space and ViaSat. What are the next contracts that O3b will sign?<\/h2>\n

Rigolle:<\/strong> What is yet not covered by any contract is what we call the tier two product, so the smaller dishes, lower data rates and more distributed networks. So if you are a mobile phone operator and want a beam of 600 kilometers of diameter and you want to have various uplink and downlink sites, you will want a smaller dish solution. This contract is still up for grabs right now, and we are in negotiations with possible suppliers as we speak. We would hope to close that in the next three to four months. <\/p>\n","protected":false},"excerpt":{"rendered":"

Operator O3b Networks has raised a total of $1.2 billion through a multi-layered finance deal from a group of investors and banks, including the African Development Bank. The deal also is covered by a guarantee from export credit agency Coface. The arrangement fully funds O3b\u2019s plans to launch its first satellites to provide low\u00e2\u20ac\u0090latency, fiber\u00e2\u20ac\u0090quality […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-85656","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/85656"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=85656"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/85656\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=85656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=85656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=85656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}