Numis apologies 'a misunderstanding of the position' of Avanti Communications*

17 June, 2011 - 07:46

T1ps
11 Days ago (2011-06-06 12:03:29)

Brokerage Numis has had to produce the following apology on Avanti Communications* (AVN);
Numis has raised doubts about the contract Avanti Communications has with TigrisNet Ltd in widely distributed emails and conversations. Avanti and its nominated adviser have provided the following assurances:

1. Identity. The UK contract counterparty is part of a group of companies under common ownership which in aggregate turns over approximately $15m per annum. TigrisNet Ltd in the UK acts as a procurement entity for the group; it procures satellite capacity and hardware from companies such as Avanti. Its sister companies in Iraq, Egypt and the USA use those services to sell to end user customers, many of which are government ministries or agencies. TigrisNet UK is thus fundamental to the entire TigrisNet group's ability to deliver its services.

2. Creditworthiness. TigrisNet Ltd has excellent credit standing. Avanti took credit references from two longstanding suppliers to TigrisNet, both large multinational companies which confirm the company's creditworthiness.

3. Contract. TigrisNet is not a "reseller" of Avanti's services - the capacity is actually sold. It signed with Avanti an irrevocable, binding contract with no Termination for Convenience rights, obliging it to pay Avanti fixed monthly amounts for fixed amounts of capacity over a ten year term amounting to $27 million.

Numis apologises if the previous communication led to a misunderstanding of the position.

-----ENDS-----
I noted at the weekend that the thesis of the shorting campaign bears is proving to be just plain wrong here - and this, today, goes further to show the holes in their arguments. As per my update yesterday, the t1ps stance remains "strong buy".

*Avanti Communications is a corporate client of Rivington Street Holdings, the owner of this website, and the SF t1ps Growth Fund owns shares in Avanti.
For further details on the fund visit www.t1psim.com or e-mail growthfund@t1psim.com.