How SATS plans to fund its proposed $1.8b WFS acquisition

It will be funded through a term loan, underwritten rights issues, and an internal cash balance.

SATS has finalised its funding plan for its proposal to acquire Worldwide Flight Services for $1.8b which will be comprised of a term loan and renounceable underwritten rights issues and an internal cash balance.

In a statement, SATS said the funding plan includes a three-year Euro-dominated term loan for around $700m from its principal bankers with an all-in cost of 4% to 4.5% annually based on prevailing Euribor. It is also comparable to SATS' existing borrowing facilities’ terms.

A renounceable underwritten rights issue of up to $800m is expected to be launched in the first quarter of 2023 to fund the project.

Temasek, through its indirect wholly-owned subsidiary Venezio Investments, expressed intention to subscribe for its pro rata entitlement to the rights issue subject to its final terms. SATS Directors who are also SATS Shareholders also plan to subscribe for pro-rata entitlements.

The $320 will be funded by SATS’s existing cash balance.

Shareholders will gather in an Extraordinary General Meeting for the approval of the proposed acquisition.