Cellphone-from-space startup AST SpaceMobile on Jan. 19 announced a long-awaited investment round, garnering $206.5 million in fresh funds via new debt, non-dilutive commercial payments and a planned draw on the company’s credit line. Another $100 million may be raised in gross from selling AST SpaceMobile shares.
The infusion of financing, which had been teased to shareholders and business partners since November, includes new investments from telecommunications and technology giants AT&T and Google, while Vodafone added to its funding.
According to AST SpaceMobile, the new money will support rollout of the Midland, Texas, company’s commercial network. The financing is a mix of equity-linked capital and non-dilutive paybacks with customer-partners, as well as a credit-line draw and separate share sale.
“The non-dilutive commercial payments by customers of the SpaceMobile network, creditable against future service revenue, provide a model for other wireless companies around the world to participate in the initial rollout of commercial SpaceMobile service,” the company notes.
The investment and new financing include:
•$110 million of 10-year subordinated convertible notes with 5.5% interest (which may be paid in kind), with a conversion price of $5.75 per share—a 39% premium to the final trading price on Jan. 16—via AT&T, Google and Vodafone.
•$20 million revenue commitment from AT&T, predicated on the launch and initial operation of the first five commercial satellites.
•$25 million minimum revenue commitment from Vodafone, subject to a definitive agreement.
•Plans to draw $51.5 million from AST SpaceMobile’s senior-secured credit facility.
•Sale of 32,258,064 shares of Class A common stock at $3.10 each.
Under the partnership arrangements, Vodafone and AT&T have placed purchase orders for network equipment to support planned commercial service for an undisclosed amount. Also, Google and AST SpaceMobile agreed to collaborate on product development, testing and implementation plans for network connectivity on Android and related devices.
AST SpaceMobile says it has agreements and “understandings” with more than 40 mobile network operators globally, in turn reaching a total of more than two billion subscribers. Besides Vodafone and AT&T, the operators include Africell, Bell Canada, Etisalat, Globe Telecom, Indosat Ooredoo Hutchison, Liberty Latin America, Millicom, MTN, Orange, Rakuten Mobile, Saudi Telecom, Smart Communications, Smartfren, STelecom Argentina, Telefonica, Telkomsel, Telstra, Zain KSA and ZIM. American Tower, Bell Canada, Rakuten and Vodafone also are existing investors. According to the reports published in aviationweek.com .
The company has been racing to loft its operational constellation before running out of funds. AST SpaceMobile has been selling stock and debt in recent years—sometimes to the shock of public investors—after its 2021 go-public dealmaking with a special purpose acquisition company resulted in far lower proceeds than expected.
