Spacecom: Chinese buyer is silent, deal likely buried

January 20, 2017

Spacecom of Israel said that it has heard nothing from prospective buyer Beijing Xinwei Technology Corp. in recent weeks and that the deal, which was derailed because of the Sept. 1 loss off the Amos-6 satellite following the explosion of a SpaceX rocket, is presumed -- if not confirmed -- to be dead. Credit: Spacecom Spacecom of Israel said that it has heard nothing from prospective buyer Beijing Xinwei Technology Corp. in recent weeks and that the deal, which was derailed because of the Sept. 1 loss off the Amos-6 satellite following the explosion of a SpaceX rocket, is presumed — if not confirmed — to be dead. Credit: Spacecom

PARIS — Satellite fleet operator Spacecom of Israel said it has had no word from prospective buyer Beijing Xinwei Technology Corp. in recent weeks and that the Chinese purchase of Spacecom is likely off the table.

The company said it has received fresh expressions of interest from unidentified parties.

The purchase, which had apparently passed Israeli government approval in addition to receiving the go-ahead from Spacecom’s board of directors, is likely a casualty of the Sept. 1 explosion of the SpaceX Falcon 9 rocket during on-pad testing prior to the launch of Spacecom’s $200 million Amos-6. 

Renegotiating contract with big DBS customer 

Spacecom on Jan. 16 announced still further repercussions from the loss of Amos-6, saying that a key customer, DBS Satellite Systems Ltd., known as yes, which is Israel’s direct-broadcast television provider, are renegotiating their services contract in light of the Amos-6 loss.

“In this context, and according to the existing agreement, yes may reduce the volume of services,” Spacecom said. 

Spacecom has since ordered an Amos-17 satellite for $161 million from Boeing Satellite Systems to replace the Amos-5 satellite at 17 degrees east.

Spacecom has also concluded an agreement with AsiaSat of Hong Kong to lease the AsiaSat-8 satellite to make up for the loss of Amos-6. 

AsiaSat-8, which AsiaSat had been operating from 103.3 degrees east, will be moved to the Spacecom slot of 4 degrees west and used by Spacecom for at least four years under the agreement, for which Spacecom is paying AsiaSat $22 million per year.

Spacecom made no mention of Beijing Xinwei in announcing its AsiaSat lease or its Boeing purchase, and one reason may be that Spacecom and Beijing Xinwei have not been speaking to each other.

In a statement to the Tel Aviv Stock Exchange, Spacecom said that while “the two sides have not decided to cease negotiations,” a couple that is not talking cannot be said to be preparing a marriage.

“In reality during the recent period, there have not been discussions between the two sides,” Spacecom said. “The sides continue to show interest in the deal [but] a number of differences on fundamental issues remain open between the two sides.”

Spacecom said other, unidentified prospective buyers “have shown interest in a a deal,” but it did not announce any formal negotiations.

Spacecom has been on and off the sales bloc for several years and held in-depth negotiations with more than one prospective strategic buyer.

 

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Peter B. de Selding
Peter B. de Selding
Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes