SATELLITE operator Asia Satellite Telecommunications is seeking to float 25 per cent of its equity this June or July in New York, London and possibly Hong Kong to raise about US$250 million. Sources within the company and industry confirmed that preparations for a listing were under way after it tried to back-track on a recent statement by an AsiaSat official which said it intended to make an initial public offer. The flotation would be handled by Goldman Sachs (Asia) this summer, sources said. AsiaSat is also considering refinancing about US$250 million worth of syndicated debt for its in-orbit satellites and the planned AsiaSat3. Industry specialists are relatively bullish about AsiaSat's initial public offering (IPO) prospects. Michael Jones, managing director of infrastructure finance specialists Babcock and Brown, which has raised funds for AsiaSat's Hong Kong rival China-controlled APT Satellite, said $250 million raised by the 25 per cent equity issue was not an unreasonable projection. 'Given that the markets are generally bullish about such communications and technology-related issues, a valuation of US$1 billion could be achievable,' Mr Jones said. More than 80 per cent of global satellite-system operator Pan American Satellite (PanAmSat) was recently put on the block and valued at about $3 billion. PanAmSat has four satellites in the air and three under construction. AsiaSat, held equally by Hutchison Whampoa, Cable & Wireless, and Shortridge (a subsidiary of Citic), already has the AsiaSat1 and AsiaSat2 satellites in orbit. AsiaSat1, launched in 1990 as the first privately owned satellite over Asia, has 24 C-band transponders offering coverage from Mongolia to the upper regions of Indonesia and from Japan to the Middle East. The satellite, which has another three years of life left, makes about $50 million a year in profit. It is bolstered by the presence of News Corp's StarTV, which holds half the capacity of AsiaSat1 and exclusive rights to cross-border TV distribution on AsiaSat1 and AsiaSat2. Mr Jones said: 'If the IPO is launched in the US, AsiaSat will have the advantage of the News Corp calling card and its StarTV connections. The Americans know and like the News Corp stock.' AsiaSat2, with 24 C-band and nine Ku-band transponders, was launched in November 1995 and covers two-thirds of the world's population. With a 15-year life cycle it should produce revenues of about $1.3 billion. StarTV holds leases of four C-band and three Ku-band transponders on the satellite. AsiaSat plans to launch AsiaSat3 in late-1997 with 28 C-band transponders and 16 Ku-band transponders. It is also planning AsiaSat4 and AsiaSat5 satellites. StarTV faces stiff competition in the next few years. Since the middle of last year nine new satellites, including AsiaSat2, have been placed in orbit over Asia. Their 211 transponders represents about 844 potential TV channels. With the 794 transponders able to carry more than 3,000 TV channels, which are due for launch in 1997 and 1998, that provides enough TV capacity to give a transponder salesmen paid on commission a nasty case of the jitters. Nevertheless, according to CEA Pacific Rim, a Hong Kong-based merchant banking group with a special interest in media and telecommunications, medium-term prospects for operators of satellites over Asia until 2000 'remain bright', especially as almost 600 transponders will be 'retired' in that period. Capacity may be rising, but so is demand as prices fall. According to CEA, a 1995 study by French satellite launch company Arianespace claimed that the Indian market alone could absorb the capacity of between 100 and 130 transponders. At that time it had less than half that number. The same study showed China needed to increase its capacity by 500 per cent. In 1994, the Chinese Academy of Space and Technology said China would not be able to meet its domestic demand before 2000. AsiaSat chief executive Peter Jackson sees plenty of reasons for optimism. 'We have 90 per cent of the capacity on our existing satellites already committed,' he said. 'We have a stream of customers wanting to lease capacity.' AsiaSat leases about 25 per cent of its capacity to customers in China, not only to TV broadcasters but also to a raft of government and private telecommunications agencies. 'Of course, China has a vast telecommunications demand that has yet to be met and we see that as a key market. 'The rural telecommunications market in many countries has been hugely underestimated. Every rural community needs, and soon will be able to afford, low-cost, rugged, remote solar-powered satellite-reception equipment that will create the hub of small telephone systems. 'Countries such as China, India and Thailand are quickly realising that to discourage the drift to the cities you have to equip the rural areas with good communications - and satellites are the most efficient way to do that.'