Beam Communications receives cash injection in heavily oversubscribed placement

Beam Communications ASX BCC ZOLEO placement Peak Asset Management
Sophisticated and professional investors were offered shares in Beam Communications at $0.25 each, which is a discount to the last trading price of $0.31.

Satellite communications technology company Beam Communications Holdings (ASX: BCC) will receive a large cash injection, with demand exceeding $12 million of what was originally a $2.5 million placement.

Leading boutique investment management and corporate advisory firm Peak Asset Management conducted the offer – initially seeking $2.5 million with significant demand coming from both local and overseas institutions, including sophisticated and professional investors.

Investors were offered $0.25 per share with a one for three option. The options have an exercise price of $0.50 and expire 31 December 2022.

The issue price of $0.25 per share including the options, represent a 19.3% discount to Beam’s last trading price of $0.31, before it went into a trading halt this morning.

Sparking investors’ appetite

In the term sheet to sophisticated and professional investors, Peak Asset noted that Beam delivered $14.9 million revenues in FY 2020, while group EBITDA rose 43% to $3 million.

The company generated an underlying net profit of $341,419 and is expecting improved on that in FY 2021.

Peak Asset also pointed out that Beam’s products have been adopted by some of the world’s largest satellite and telecommunications companies including Iridium, Telstra, KDDI, Inmarsat and Thuraya.

Beam provides satellite communications solutions to all market sectors, with its flagship products being ZOLEO and Iridium GO.

Satellite message solution ZOLEO was launched in January this year across North America and Australia.

It is expected Beam will have shipped 22,000 ZOLEO units by the December quarter this year.

With the ZOLEO technology, Beam generates recurring revenues from monthly airtime subscriptions.

ZOLEO enables seamless connectivity beyond cell coverage and includes SOS alerting with 24/7 monitoring, location sharing, global two-way text, email and weather forecasts.

This product presents Beam with a large market with meeting disaster relief, military and government communication requirements.

Meanwhile, Beam’s Iridium GO satellite devices have continued to be popular with consumers headed off-the-grid.

Last month, leading satellite services company Iridium Communications (NASDAQ: IRDM), which boasts a market capitalisation of $5.1 billion, ordered an additional 5,000 Iridium GO units from Beam, which will be shipped later this year.

To meet increasing demand for both devices, Beam has expanded its manufacturing capabilities.

Beam will also develop the next generation of Iridium’s Certus devices, which will have data speeds more than 35 times faster than pervious transceivers.

Driving Beam’s growth is a highly experienced board including managing director Michael Capocchi, who has worked in the ICT industry for more than 20 years, and had senior managing positions with Optus, Myer and Iridium.

Non-executive director David Stewart is also highly experienced and has personally invested in Beam. He is the company’s largest shareholder and is a previous chief executive officer and managing director of NetComm Ltd and NetComm Wireless.

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