The Israeli communications ministry has delayed its sign off of the sale of satellite operator Spacecom to Hungarian IT and telco firm 4iG.
Announced in October, the deal would see 4iG and its two subsidiaries – Hungaroo DigiTel and CarpathiaSat – acquire a 51% majority stake in the Israeli satellite operator. 4iG agreed to invest US$68 million in the company.
The deal may however be derailed due to concerns over ties between 4iG and prime minister Viktor Orban. Local outlet The Jerusalem Post reports that Israel’s security agency, the Shin Bet, has flagged this as a reason to halt the deal.
While Spacecom’s licence does not preclude it from being sold to foreign shareholders, there are fears that the controversial Hungarian prime minister would be in control of the Amos satellite array which serves as an important strategic communications channel.
Hungarian officials have refuted the allegations, and said that it is purely a business deal and has nothing to do with politics.
Spacecom’s two biggest customers are the Israeli government and local satellite TV operator Yes, though these contracts will end in the coming years as both clients move to different technologies.
The deal is all but wrapped up and had been approved by Spacecom’s general assembly in December 2021, but is on the brink of falling apart – particularly given the prior behaviour of communications minister Yoaz Hendel.
In 2021, a Hong Kong-based company attempted to buy a majority stake in the country’s second-largest telco Cellcom. Hendel never authorised the deal due to security concerns and pressure from the US. Hutchison, the interested party, eventually withdrew its offer and Cellcom instead was bought by an Israeli group.