November 30, 2016 / 12:56 PM / in a year

Beijing Xinwei still in talks to buy Spacecom but for a reduced price

JERUSALEM/HONG KONG, Nov 30 (Reuters) - Beijing Xinwei Technology Group remains in negotiations to buy Israeli satellite operator Space Communications, but the purchase price has been reduced by a third to about $190 million, the companies said on Wednesday.

The price could still be adjusted further, they said in separate statements to the Shanghai and Tel Aviv stock exchanges.

Beijing Xinwei said there are disagreements among the parties and that reaching a deal remained uncertain.

In late August, Beijing Xinwei had agreed to buy Spacecom for $285 million, but the deal was put on hold after a Spacecom communications satellite was destroyed in early September. Still, the companies said they would continue to reach a deal.

Last week, an amended takeover deal deadline was extended to Dec. 1.

Once completed, Spacecom would become a private company, though its bonds will continue to be traded on the Tel Aviv Stock Exchange.

Initially, reaching a deal was contingent on the successful launch of Spacecom’s Amos-6 satellite on Sept. 3.

But two days before the scheduled launch an explosion destroyed a Falcon 9 rocket belonging to Elon Musk’s SpaceX during preparations for a routine test firing at Cape Canaveral in Florida.

Since the incident, Spacecom’s shares have fallen some 56 percent, while its market value is down to 568 million shekels ($148 million).

Spacecom’s shares were 0.5 percent lower in afternoon trading in Tel Aviv at 27.50 shekels. Xinwei’s shares rose 0.2 percent.

Israel’s Eurocom Holdings owns 64 percent of Spacecom.

$1 = 3.8368 shekels Reporting by Steven Scheer in Jerusalem, Meg Shen in Hong Kong, editing by Louise Heavens

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