MIAMI, Fla. — AST SpaceMobile has raised $400 million through convertible debt to help ramp up manufacturing for its direct-to-smartphone constellation.
Investors can convert the debt, which priced Jan. 22 to pay interest at 4.25%, into AST SpaceMobile equity if shares rise above $45, or cash at the bond’s maturity in 2032.
Revenue-sharing agreements to provide satellite connectivity to telcos including AT&T sent shares soaring last year, making AST SpaceMobile one of the world’s most valuable space companies, although shares have since declined to around $22.
AST SpaceMobile opted to convert a separate $148 million convertible financing deal upon reaching its one-year anniversary as part of those agreements, bringing AT&T, Verizon, and Google on board as shareholders.
The company said it could also seek to expand its bond by up to $60 million within a two-week window.
Gearing up
The operator now has more than $900 million of cash on its balance sheet to shift production of its Block 2 BlueBird satellites into a higher gear this year, after deploying five smaller Block 1 spacecraft to low Earth orbit (LEO) in September.
At about 223 square meters when fully deployed, a Block 2 satellite is significantly larger than Block 1, which spans 64 square meters, enabling 10 times the capacity to support up to 120 megabits per second (Mbps) peak data rates.
In a related regulatory filing, AST SpaceMobile recorded between $58.3 million and $62.3 million in preliminary total operating expenses for the last three months of 2024.
AST SpaceMobile has contracts to launch up to 45 BlueBird satellites in the next two years, and expects its next spacecraft to leave facilities in Texas as early as March for a launch from India.
The company also has launch options to deploy around 15 more satellites to ensure it reaches the level needed to enable U.S. anchor customers to keep subscribers connected outside cell tower coverage nationwide.
Following the launch of a single Block 2 BlueBird on India’s GSLV rocket, two SpaceX Falcon 9s are slated to carry four satellites each for the company, followed by successive Blue Origin New Glenn rockets capable of deploying eight at a time.
In the meantime, AST SpaceMobile has filed a request with the Federal Communications Commission to begin Block 1 beta services.
In November, the FCC granted SpaceX conditional approval to provide commercial direct-to-smartphone services in the United States with its cellular partner T-Mobile.
AST SpaceMobile’s shares fell about 10% following news of the bond, along with a broader sell-off of early-stage space stocks that rose on the U.S. inauguration, and are currently trading at around $19.54.
