While the company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19.
Satellite startup OneWeb has announced that the company and certain of its controlled affiliates have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York. The Company intends to use these proceedings to pursue a sale of its business in order to maximise the value of the company. It comes as businesses are struggling to stay afloat due to the financial loss over the global coronavirus pandemic.
OneWeb, which is backed by Japan’s SoftBank, has filed a number of customary motions with the US Bankruptcy Court seeking authorisation to support its ongoing operations during the Chapter 11 process, including approval for the consensual use of its existing cash collateral to continue to fund the business.
In addition, 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. Together, these actions will allow OneWeb to meet post-petition obligations to its remaining employees and certain vendors in the ordinary course.
To date, OneWeb has successfully launched 74 satellites as part of its constellation, secured valuable global spectrum, begun development on a range of user terminals for a variety of customer markets, has half of its 44 ground stations completed or in development and performed successful demonstrations of its system with broadband speeds in excess of 400 Mbps and latency of 32 ms. In addition, OneWeb’s commercial team has seen significant early global demand for OneWeb’s high-speed, low-latency connectivity services from governments and leaders in the automotive, maritime, enterprise, and aviation industries.
Commenting on the development, Adrian Steckel, CEO of OneWeb, 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. So many people have dedicated so much energy, effort, and passion for 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.”