Telesat holds Hellas-Sat ace

By Chris Forrester

The Hellas-Sat on/off sale process has been taking place – or not taking place – for the best part of two years. Greece’s near-bankrupt position makes a sale ever-more urgent, and it has been widely reported that Greek telco OTE (itself controlled by Deutsche Telekom) is seeking around €150 million from the sale of Hellas-Sat. Both SES and Eutelsat have publicly expressed an interest in acquiring Hellas-Sat.
However, there is a potential problem in the sale plans in the shape of Telesat of Canada. Telesat confirms it remains a “direct holder of a small minority stake” in Hellas-Sat, although declines to provide any background information on the status and influence that its modest stake might have.
OTE, in its latest financial statement, says it controls 99.1 per cent of Hellas-Sat SA. Ten years ago the position was a little different, and the then (Cyprus-based) Hellas Sat Consortium, which later morphed into Hellas-Sat itself, saw the Cyprus Development Bank/Avacom-Net owning 55 per cent between them, OTE with 25 per cent and Hellenic Aerospace (EAB) with 10 per cent. The remaining 10 per cent was held by Canada’s Telesat in return for participating in the funding. Telesat had “partnered” with Cyprus’ AvacomNet in the development of the concept. The Greek government, of course, still owns about 10 per cent of OTE itself, and is thus a key player in the overall strategy.
A 2008 study (‘Digital Television in Europe’, Edited by Wendy Van den Broek & Jo Pierson) talks of Telesat’s stake in Hellas-Sat being just 0.39 per cent. This minute stake is seen as a challenging obstacle to the sale, in that the terms of Telesat’s holding gives them – in terms – the right of first refusal over the any sale and how the sale is conducted.
The strategy seemed to have been that Hellas-Sat would be offered for sale at an auction, and that the price achieved could be matched by Telesat if the Canadians wanted the business. This simple process is, however, not quite so straightforward in terms of its execution. The terms of Telesat’s pre-emption rights do not permit this process. Inside Satellite TV understands that it is – in general terms – the reverse of this which is allowed, whereby Hellas-Sat has to propose a price and offer that price first to Telesat. Should Telesat accept the price then it gets the prize. If Telesat declines the offered terms, then the offer can be made to the other major operators. Should that offer be declined by the likes of SES, Eutelsat or anyone else, then another price has to be evaluated and the process started all over again. It is not an easy process to understand or contemplate for either the selling Hellas-Sat or any potential buyer.

Industry observers suggest that at long last the Hellas-Sat sale could now get underway, and that Telesat is now ready for a sale. The lawyers are said to be involved, looking at how a sale can be constructed which satisfies all parties. The ‘sale’ having been bubbling under now for so long is said to be potentially having a destabilising influence on staff, and Hellas-Sat’s own – and necessary – plans to procure a replacement craft. Of course, Telesat itself could well be a buyer, either for its own longer-term use or to re-sell subsequently at a typical Dan Goldberg (president of Telesat) profit!

Hellas-Sat 2 had a complicated history. In January 1997, Intelsat contracted with Matra Marconi Space to build Intelsat K-TV. The contract was transferred to New Skies Satellites in May 1998, when it was renamed NSS-6. In March 1999, it was shipped to Kourou for launch on an Ariane 4 vehicle but returned to the factory after a defect was found in its solar arrays. New Skies cancelled the contract when the Asia/Pacific market collapsed. Intelsat again bought the stored satellite, renaming it Intelsat APR-3 (or Sinosat-1B), in February 2001, but with the requirement of launching on a Chinese Long March 3B as part of an agreement involving Sino Satellite Communications Co. Finally bought by Hellas-Sat it was launched aboard an Atlas-5 rocket in May 2003.

Data: Jane’s Space Systems & History