- OneWeb files for bankruptcy protection in the US due to uncertainty during Covid-19 pandemic
- CEO Steckel: “We have been forced to reduce our workforce and enter the Chapter 11 process”
- Impact on London-based parent and subsidiary companies remain unclear
The London-based satellite start-up OneWeb has filed for bankruptcy protection in the US pointing to the instability to secure additional investors during the Covid-19 crisis.
The company has voluntarily filed for bankruptcy relief under Chapter 11 of the US Bankruptcy Code with its intent to pursue a sale of its business in order to maximise the value of the company.
OneWeb chief executive Adrian Steckel said: “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. Today is a difficult day for us at OneWeb.”
Steckel acknowledged the commitment and dedication seen from its investors - including the backing from Japanese giant SoftBank – and said he hopes in the future the company can complete its mission and build on the effort and billions of invested capital.
He added: “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.”
OneWeb’s mission is to enable everyone across the globe to access the internet through its low earth orbit (LEO) satellites.
To date, the company has successfully launched 74 satellites as part of its constellation and confirmed it has secured global spectrum to begin developing a range of user terminals for a variety of customer markets.
Last week it successfully launched 34 LEO satellites from Kazakhstan.
In a statement the firm claim: “The OneWeb ecosystem has transformed the satellite industry introducing innovative new technologies and operational advances. These developments have fundamentally changed the economics of satellite communications, opening up new markets such as cellular backhaul and connectivity on the move.”
OneWeb is actively negotiating debtor-in-possession financing, which, if acquired and approved by the Bankruptcy Court, will ensure OneWeb is able to fund additional financial commitments as it conducts a sale process under Section 363 of the US Bankruptcy Code.
The firm said it plans for these actions to allow OneWeb to meet post-petition obligations to its remaining employees and certain vendors in the ordinary course.
In October last year the company issues its Consolidated Financial Statements in London which said that OneWeb had secured nearly $3.3 billion in equity and debt financing.
However it remains unclear of the impact this filing will have on its London-based parent company, OneWeb Communications Ltd as well as its Jersey business, OneWeb Ltd and WorldVu Satellites Ltd.
No comments yet