Spacecom, Xinwei eye amended takeover deal after satellite destroyed

Reuters News
Posted: Sep 07, 2016 12:56 PM

JERUSALEM (Reuters) - Israel's Space Communications Ltd and Beijing Xinwei Technology Group have given themselves 30 days to salvage a deal that was contingent on the launch of a satellite destroyed in an explosion last week.

Xinwei agreed last month to buy Space Communications (Spacecom) for $285 million, pending the successful launch and operation of Spacecom's $200 million Amos-6 communications satellite.

The launch had been due to take place on Saturday but the satellite was destroyed a few days earlier when a Falcon 9 rocket belonging Elon Musk's SpaceX exploded during a routine test firing at Cape Canaveral in Florida.

"Spacecom and the purchaser (Xinwei) will work during the 30 business days to examine an adjusted deal," Spacecom said in a statement to the Tel Aviv Stock Exchange on Wednesday, adding that the satellite's loss would be taken into consideration.

Spacecom said it would not negotiate with any other parties for the time being.

Amos-6 was to be used by a number of clients, including Facebook and Eutelsat Communications which had leased the satellite's broadband services to expand internet access in Africa.

Both firms are now pursuing other options, the companies said in separate statements after Thursday's accident.

The cause of the accident is under investigation. Neither SpaceX, nor the FAA which is overseeing the investigation, have said how much damage the explosion caused at SpaceX's primary launch site at the Cape Canaveral Air Force Station.

Spacecom's chief executive told Reuters this week that he would want to see "several safe flights" from SpaceX before using Musk's space firm again to launch one of his company's satellites.

(Reporting by Steven Scheer; editing by David Clarke)