OneWeb is filing for Chapter 11 bankruptcy. Photo: OneWeb
OneWeb filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Friday, March 27. The company has been one of the standard-bearers in the Low-Earth Orbit (LEO) movement, with its plan to provide high speed internet to the world by 2021.
In a Friday night news release, OneWeb said it intends to use the bankruptcy proceedings to pursue a sale in order to maximize the value of the company. The company said that it had recently been engaged in “advanced negotiations” to fund the company through the deployment and commercial launch of its constellation, but these negotiations fell through because of the financial and market impacts of the COVID-19 pandemic.
Softbank Group is OneWeb’s main investor, and holds 37.41 percent equity, followed by Qualcomm Global Tradingwith 15.93 percent equity, according to OneWeb’s bankruptcy filing.
In a statement, CEO Adrian Steckel confirmed there will be layoffs.
“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere. Our current situation is a consequence of the economic impact of the COVID-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere,” Steckel said. “Today is a difficult day for us at OneWeb. So many people have dedicated so much energy, effort, and passion to this company and our mission. Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital. It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the Company’s remaining employees are focused on responsibly managing our nascent constellation and working with the Court and investors.”
Two anonymous sources close to the company confirmed the impending bankruptcy on Friday afternoon. Bankruptcy plans were first reported in both Space Intel Report and The Financial Times, and are sure to send shockwaves throughout the industry.
The bankruptcy filing comes just days after the company successfully launched another 34 satellites in its constellation on March 21 via an Arianespace Soyuz launch vehicle. It was the company’s second 34-satellite launch within six weeks, bringing the total number of satellites in its constellation to 74. This past July, OneWeb Satellites – a joint venture of OneWeb and Airbus – opened a high-volume, high-speed satellite production facility in Merrit Island, Florida, near the Kennedy Space Center. The company credited the success of its two recent launches in 2020 to the production facility.
This past September, Intelsat filed a lawsuit against OneWeb and Softbank Group in the State of New York, accusing the companies of fraud, conspiracy, and breaching contract. The lawsuit stemmed from an agreement between Intelsat and OneWeb that was made in 2015 after Intelsat decided to join OneWeb’s group of initial investors. Under that agreement, Intelsat said it would partner with OneWeb to use OneWeb’s LEO platform to complement Intelsat’s Geostationary Orbit (GEO) satellite services. Complementing the 2015 commercial agreement, Intelsat announced that it would make a minority share investment of $25 million in OneWeb. The companies would also collaborate to develop hybrid LEO/GEO end-user access terminals.
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In February 2017, Intelsat and OneWeb entered into a combination agreement pursuant to which Intelsat and OneWeb would merge in a share-for-share transaction. Intelsat and SoftBank Group also entered into a share purchase agreement in which SoftBank would buy voting and non-voting shares in the combined company for $1.7 billion in cash and take a 39.9 percent voting stake. Intelsat, OneWeb, and SoftBank agreed to dissolve the potential merger in June 2017.
OneWeb is headquartered in London, with offices in McLean, Virginia and Mountain View, California.
This story was originally published on Via Satellite, a sister publication to Avionics. Click here to view the original article.