OneWeb — three launches into a series of nearly 20 missions to deploy 650 satellites to provide global Internet service — has announced it filed for Chapter 11 bankruptcy protection and reduced its workforce after unsuccessful negotiations for more cash from its largest investor.
Headquartered in London with a significant workforce in the United States, OneWeb said late Friday it made the bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of New York.
OneWeb said it is pursuing a sale of its business after efforts to raise additional money to fund the company’s satellite constellation and launch of commercial services fell through.
“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,” OneWeb said in a statement.
Sources familiar with OneWeb’s financial negotiations told the Financial Times that the company was seeking up to $2 billion from the Japanese conglomerate SoftBank before the COVID-19 coronavirus pandemic led to a downturn in global financial markets.
Before the COVID-19 pandemic, SoftBank was facing financial headwinds related to other companies in its investment portfolio. SoftBank has signaled it may pull out of a $3 billion tender offer to WeWork, which leases shared workspaces for startups, and announced earlier this month plans to sell up to $41 billion in assets.
SoftBank is invested $2 billion into OneWeb since 2016, making the Japanese holding company OneWeb’s largest financial backer. In total, OneWeb had announced $3.4 billion in money raised from SoftBank and other investors, including Richard Branson’s Virgin Group, Qualcomm, Airbus, Coca Cola, Intelsat, Hughes Communications, and the Mexican conglomerate Grupo Salinas.
But that wasn’t enough to carry OneWeb through the fully deployment of nearly 650 satellites to beam Internet signals worldwide.
“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere,” said Adrian Steckel, CEO of OneWeb. “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.