NuRAN Wireless (NUR.C) announced a non-brokered private placement for up to $11 million.
The placement consists of 7,189,542 units being offered at the price of $1.53, with each unit comprised of one share of NUR and one common share purchase warrant, which are exercisable at the price of $2.40 for a period of 24 months after they are issued. However, the warrants are subject to acceleration in the event that the trading price of the Common Shares equals or exceeds $2.64 for any period of 10 consecutive trading days at any time after four months and one day from the date of issuance. If the warrants are accelerated, their date of expiration will be brought forward to the 30th day after the notice is provided.
NuRAN has already entered into a subscription agreement with Space-Communications (TASE:SCC), which will see them purchase 2,614,379 Common Shares and 182,000 Warrants for gross proceeds of $4,000,000. Spacecom will hold an approximately 9.3% equity stake in NuRAN on an undiluted basis, assuming the current offering’s goal of $11 million is met.
That being said, there are a BUNCH of conditions for Spacecom’s subscription agreement, most of which involve entering into “mutually acceptable” agreements. It seems this is more than just an investment, and is more like the start of a partnership.
Spacecom is a leading global fixed-satellite operator and satellite service provider, offering tailored end-to-end communication solutions to the media and broadband industries. Operating the advanced AMOS satellite fleet, Spacecom provides innovative broadcast and broadband satellite services with European, Pan-African, Middle Eastern and Asian coverage and cross region connectivity.
Much of Spacecom’s satellite coverage of Africa is done by AMOS-17, which they claim is the most advanced high-throughput satellite to provide satellite communication services to Africa. NuRAN’s mission is to connect billions of people in rural and remote regions to a fast, reliable and expansive wireless network through innovative and affordable solutions by offering millions of people in developing countries the ability to connect to a global network and communicate over long distances efficiently and affordably.
Given all this, it’s not that surprising the two companies see an intertwined future as mutually beneficial.
“A lead order of this magnitude from Spacecom, a leading global satellite operator, is not only a vote of confidence in NuRAN but also an affirmation of our approach in bridging the digital divide. We are extremely proud to have Spacecom as a strategic partner and shareholder. Mobile connectivity is no longer a luxury but an essential need for communication, e-commerce, remote healthcare and education and together NuRAN and Spacecom are committed to bringing immediate relief to much of rural and remote Africa” stated Francis Letourneau, CEO of NuRAN Wireless.
The conditions for the subscription agreement include commercial agreements for the engagement of Spacecom as an exclusive satellite capacity provider, including a binding agreement to use Spacecom satellites in all their future projects, as well as service order pursuant to NuRAN’s operations with Orange in Cameroon and the Democratic Republic of the Congo.
An agreement that would entitle Spacecom to participate, on the same terms and conditions as any third-party investor, in the event that NuRAN sells any of part of its African subsidiaries. They would also receive the right of first refusal agreement pursuant to which Spacecom will be entitled to match any offer received by NuRAN from time to time for the financing of all or any part of its operations in Africa.
There are plenty of other conditions that would further intertwine the two companies, but I will just leave it there: the two companies are planning on getting involved with one another, and NuRAN is raising a lot of funds at the moment.
Dan Zajicek, Spacecom’s CEO, said “We are proud and excited to take a strategic step and partner with NuRAN, which turns technology to effectively service rural population and provides a great value to mobile operators in Africa. The unique capabilities of our AMOS-17 satellite along with the NuRAN investment and partnership shows our long-term commitment to set Spacecom as a leading and dominant communication service provider. We are pleased to take this step and look forward to unlocking the rural potential in Africa together.”
Following today’s news, NUR shares are down 15 cents and are currently trading at $2.05.
Full disclosure: NuRAN Wireless is not an Equity Guru marketing client, but we do own some stock in the company.