Israeli satellite company loses contact with satellite, suffers heavy losses in stock exchange
The Russian-built satellite accounted for one third of Spacecom's revenue.
By ADI BEN-ISRAEL/GLOBESUpdated: NOVEMBER 22, 2015 11:12Amos 5 satellite launch.(photo credit: SPACECOM)
Spacecom Satellite Communications Ltd. lost contact with its Russian-built satellite Amos 5 on Saturday, at 06:45 Israel time, according to the company's notification to the Tel Aviv Stock Exchange, causing a hiatus in the company's customer service capabilities, particularly in African countries.Spacecom, under the leadership of Shaul Elovitch, has a market cap of NIS 1.1 billion on the Tel Aviv Stock Exchange. According to it's second quarter financial statements, the orders backlog for the satellite was $136 million.The satellite is recorded in Spacecom's books at $153 million.In the first six months 2015, Spacecom had a revenue of $54 million and posted a loss of $1.4 million.Loss of contact with the Amos 5 resulted in the loss of about a third of Spacecom's revenues.The Amos 6 satellite, for which Spacecom has already signed a $1 billion contract with Facebook, is due to be launched only in February next year. Capital market sources estimate that it will take about three years to launch a replacement satellite for Amos 5.Spacecom's share price is currently down by about 30% on the Tel Aviv Stock Exchange. "The company shrank by a third this morning," a market source said.The Amos 5 satellite is insured at a value of $158 million, and Spacecom stresses that even if the satellite fails completely, the effect on its shareholders' equity will be "negligible".Amos 5 was launched from a site in Kazakhstan in 2011, and even before its launch the company signed a five-year contract for satellite communications in Africa worth nearly $28 million.