Sources say Al Yah Satellite Communications Company will raise around $500m
A unit of Abu Dhabi state investment fund Mubadala aims to raise financing for its third satellite project in 2015, three sources familiar with the matter told Reuters.
Al Yah Satellite Communications Company (Yahsat) will raise around $500 million through a mixture of debt and equity, one of the sources said.
Fully-owned by Mubadala, Yahsat announced plans in June to launch its third satellite in the fourth quarter of 2016. Al Yah 3 will offer satellite coverage to 17 countries and 600 million users across Africa and Brazil, it said at the time.
The satellite will be designed and build by Orbital Science Corporation, Yahsat confirmed in September.
Several United Arab Emirates companies have sought to raise money in the loan market in recent months, aided by low borrowing rates reflective of the buoyancy of the local economy and the high amount of cash in the banking system.
The precise structure for the financing was currently being worked on with financial advisor HSBC but Yahsat plans to raise the debt component in 2015, with other banks then invited to join the deal, the other two sources said.
Mubadala declined to comment when contacted by Reuters. The sources spoke on condition of anonymity as the information isn't public.
It is six years since Yahsat secured $1.2 billion to finance its first two satellites, when a group of banks provided financing stretching over a 14-year period.
Dubai Aluminium has chosen three banks to arrange a $1.8 billion seven-year loan, Reuters reported last week.
Dubai Festival City (DFC), a unit of conglomerate Al Futtaim Group, and Tecom Investments, part of DubaiHolding, are also both currently in talks with banks to raise loans worth around 4 billion dirhams ($1.1 billion) each.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.