On August 24th, 2016, Xinwei Group agreed to acquire 100% shares of Israeli Space-Communication Ltd. (hereinafter referred to as SCC) through its subsidiary Luxembourg Space Telecommunication S.A. SCC is the only Israeli satellite communication operator. It was registered in Israel and got listed on the Tel Aviv Stock Exchange. SCC is a global satellite communication service provider serving Europe, Middle East, Africa and Asia, making it an influential enterprise in the global satellite communication industry. This acquisition is the fruit of several negotiations and concerted efforts of Xinwei Group and SCC. The merger will turn SCC into the Group’s wholly-owned subsidiary.
Amos-2, Amos-3 and Amos-4 satellites in operation of SCC provide communication service platforms, DTH and BDS multi-frequency broadcast operations for professional satellite TV broadcasting, and data transmissions for the Internet, telecommunications companies, infrastructure construction and energy development.
This acquisition is in line with the Group’s international development strategy, marking a substantial breakthrough in turning the Group into a satellite operator with global coverage.
Satellites of SCC cover the Far East, the Middle East, Africa, Europe and the U.S., while the Nicasat-1 of the Group covers the North America, Central America, South America, Antarctica and numbers of islands across the Pacific Ocean. The coverage areas of the two complement each other, enabling the total satellites of the Group to cover 95% of the world’s main populated area. Through this, Xinwei Group will become one of the few satellite operators with almost 100% global coverage.
This acquisition is of great significance for the Group’s development.
First, it will secure hard-won orbit resources for the Group. The global communication satellite market is undergoing integration and valuable orbits are rare resources in the space. Areas covered by the orbit resources of SCC are countries and regions with fast-growing demand for satellite communication services, among which the Middle East is one of the world’s fastest growers in terms of revenues from satellite operation services.
Second, it will accelerate the Group’s planning and construction of the integrated space and terrestrial information network based on satellite communication and ground communication. This will amplify our first-mover advantage in integrating the space and the ground, creating favorable conditions for the construction and operation of global space Internet system. Currently, the Amos series of satellites operated by SCC composes Amos-2 and Amos-3 positioned in the 4° W longitude orbit, Amos-4 positioned in the 65° E longitude orbit and Amos-6 planned to be launched early next month to replace Amos-2. The Group can utilize these orbit resources of SCC to provide ground communication solutions and satellite communication services for the “One Belt, One Road” areas and the international market. In addition, as SCC enjoys good business performance, the acquisition, once accomplished, will be conducive to enhancing the Group’s profitability.
It’s worth noting that after this acquisition, the Group will obtain a professional team with 20 years’ experience in operating communication satellites, which will do great benefit to elevating the capacity of talents for satellite communication of the Group.