Shares in satellite firm Avanti Communications fell by almost a third on Monday after the AIM-quoted firm said it needed to raise more cash or default on its debts and face possible insolvency.
The company has offered to trade $557m in debt due to mature in 2023 into equity that would leave note holders with 92.5% of the enlarged share capital.

It also said it planned to raise up to £4.33m through an open offer of up to 38.6m shares at 11.225 pence each.

Avanti said it would still have $118m in debts maturing in 2020 and $323.3m maturing in 2021.

It also has to make a final $40m payment to Orbital ATK to be paid at the earlier of completion of in-orbit testing or three months after the launch of HYLAS 4 satellite.

"Shareholders should be aware that if the restructuring does not complete by 30 April 2018, the company will default on its bond interest payable under the existing bond indentures," Avanti said .

It added that if the restructuring completes but the company is unable to raise at least $50m in extra cash and secure $40m infrequently recurring revenue in pipeline by the end of June it would be "highly likely to be unable to pay its creditors.

"In the event that the company is unable to meet such obligations as a result of the failure of the restructuring to complete or the failure to raise sufficient additional funds, the directors would likely seek to place the company into some form of insolvency proceeding, or a creditor may take action to enforce or initiate an insolvency proceeding.

"Any such proceeding would be likely to result in little or no value for shareholders."

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Avanti Communications Group (AVN) share price