Space Communications is sold to the Chinese Xinwei Group just days before the Amos 6 launch

The Chinese will pay only 285 million dollars, for a company with 153 million dollars in its coffers. The deal was signed a few days before the launch of the Amos 6 satellite, which was designed and manufactured by the Aerospace Industry at a cost of about 200 million dollars

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Spacecom has signed a merger agreement with Luxembourg Space Telecommunications, which is owned by the Chinese communications company Beijing Xinwei Technology Group, for $285 million. The company's coffers contain equity amounting to about 158 ​​million dollars, so the net price at which the company is sold is only about 135 million dollars.

Upon completion of the merger, Halal shares will be delisted from trading on the Tel Aviv Stock Exchange and will become a private company fully owned by the purchaser. The bonds issued by the company to the public will continue to be traded on the stock exchange, and accordingly the company will continue to be a "reporting corporation". The transaction depends on receiving regulatory approvals and the approval of Halal's shareholders' meeting.

Xinwei Group is a Chinese telecommunications group that provides solutions to telecom providers. It is active in the fields of cellular communication, equipment sales, technical cooperation and in the field of communication satellites. It is traded on the Shanghai Stock Exchange according to a market value of about 7.6 billion dollars.

Amos' damage trail 5

Halal Communication Company is under the control of the Eurocom Group and is engaged in providing satellite communication services through the Amos 2, Amos 3 and Amos 4 satellites that are owned by it. The new Amos 6 satellite is designed to replace the Amos 2 satellite, which will end its commercial service on the first of November this year.

In the last year, the company has suffered a large decrease in sales. In the first half of 2016, its sales totaled approximately $33.8 million compared to more than $54 million in the same period last year. The decrease in sales is mainly the result of the failure of the Amos 5 satellite, which was designed and manufactured in Russia, and was rendered useless after launch. The complete failure of the satellite caused the company increased expenses and losses of approximately $19 million in sales in the first half of 2016.

Amos 6 will be launched in the coming days

The deal was signed a few days before the launch of the Amos 6 (Amos) satellite produced by the Aerospace Industry, which is scheduled for the first week of September 2016. The satellite will be launched from the launch site at Cape Canaveral in Florida, USA. After the launch, it will continue on its way to the designated track point (four degrees west) for about 11 more days. During several weeks after the launch, a comprehensive series of tests will be carried out to check the integrity of the systems and prepare them for commercial activity.

Amos-6 is one of Israel's heaviest satellites, and its weight is expected to be about 5.5 tons. IAI won the project after fierce competition against the Russian ISS company, which produced the Amos-5 satellite and is owned by the Russian government.

Will the Israeli government support the deal?

Now we have to see if the regulator in Israel will approve the execution of the transaction. The State of Israel has many investments in the Communications Space Company, which are intended to promote the space industry in Israel, to generate knowledge in the production of communication satellites and to help the aerospace industry maintain its space capability. The perception in Israel was that the Amos satellite program was of national importance, and therefore the Israeli Space Agency was also involved in the establishment of the consortium that provided the financing for production.

Already from the launch of the Amos 1 satellite, Amos satellites provided communication services to the Ministry of Defense and he was involved in the discussions and financing plans for the satellites. Among other things, the Aerospace Industry has pledged to give the space company a loan of 47 million dollars to finance the production of the Amos 6 satellite, the total scope of which is estimated at more than 200 million dollars.

Now, it remains to be seen whether Israel will easily give up a major share in the local space industry, or whether it will demand a commitment to continue the production of satellites in the country.