Avanti Communications : Pre-Close Trading Statement and Update on Financing Requirements

Avanti Communications Group plc

('Avanti', the 'Company' or the 'Group')

Pre-Close Trading Statement and Update on Financing Requirements

Full Year 2016 Trading Update

Avanti (AIM: AVN) a leading provider of satellite data communications services in Europe, the Middle East and Africa confirms that revenue for the financial year ('FY') ended 30th June 2016 is expected to be approximately $83m. This represents growth in core revenues year-on-year (excluding the spectrum sale in the prior year) of over 35%. EBITDA is expected to be approximately $8m.

Avanti's commercial reputation for high service quality and product innovation is strong, enabling it to win high value contracts with prestigious telecoms companies. In particular, the Group is leading the market in winning cellular backhaul business, and many opportunities are opening up around the EMEA region. Contract wins in the fourth quarter were over $70m showing commercial traction is building. Cash at year end was $57m.

The economic backdrop is nonetheless challenging. In Africa, ongoing currency depreciation has resulted in the need for the Company to help some smaller broadband service providers with exchange rate adjustments and rework some of their long term commitments. Elsewhere, larger high credit quality telecoms and government customers are demanding longer credit terms, impacting working capital. Given these challenges, the previously guided 50% recurring revenue growth target will be reduced for FY2017 impacting EBITDA.

Funding Requirements

Avanti has based its funding plan on cash to be generated from the business which, as commented above, is growing more slowly than expected. To be prudent, and as previously announced, the Company took steps to secure additional debt facilities. The Company is at a final stage in the negotiation of an Export Credit Agency Facility which has been credit committee approved. However, it has now become probable that as a pre-condition to the full availability of the facility and to satisfy working capital requirements the Company will need to raise at least $50 million of equity.

The Company will be discussing an equity issue with potential investors through its advisers. In addition, Avanti's adviser, Jefferies International Limited, is engaging in discussions with a number of potential strategic investors in Avanti.

The Board is focussed on ensuring that the Company has the best opportunity to benefit from its early market advantages and forthcoming launch of HYLAS 4, which will more than double available capacity without materially adding to the Group's operating cost base.

The Board has also identified possible cost saving initiatives in operating and capital expenditure to save up to $58m over a three year period.

If Avanti is not able either to secure the above funding or deliver on contingency cost reduction or deferral measures, the Company may not have access to sufficient liquidity to meet its funding requirements through Q2 FY 2017. The Company will keep the market updated as appropriate.

-END-

For further information please contact:

Avanti: Matthew Springett, +44 (0)207 749 6703

Cenkos Securities: Max Hartley / Nicholas Wells (NOMAD), +44 (0)207 397 8900

Jefferies: Dominic Lester, Johnathan Wilcox, +44 (0) 20 7029 8000

Montfort: Nick Miles / James Olley, +44 (0)203 514 0897; +44 (0) 7973 130 669; +44 (0) 07974 982 302

Notes to editors

About Avanti Communications

Avanti connects people wherever they are - in their homes, businesses, in government and on mobiles. Through the HYLAS satellite fleet and more than 180 partners in 118 countries, the network provides ubiquitous internet service to a quarter of the world's population. Avanti delivers the level of quality and flexibility that the most demanding telecoms customers in the world seek.

Avanti is the first mover in high throughput satellite data communications in EMEA. It has rights to orbital slots and Ka-band spectrum in perpetuity that covers an end market of over 1.7bn people.

The Group has invested $1.2bn in a network that incorporates satellites, ground stations, datacentres and a fibre ring.

Avanti has a unique Cloud based customer interface that is protected by patented technology.

Avanti Communications is listed in London on AIM (AVN:LSE).