OneWeb Files for Bankruptcy as Company Fails to Raise Funds Amidst the COVID-19 Outbreak

OneWeb, the company that was trying to create a constellation of LEO satellites to provide wireless connectivity across the globe, has filled for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York.

To date, OneWeb had 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, had 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 had seen significant early global demand for its high-speed, low-latency connectivity services from governments and leaders in the automotive, maritime, enterprise, and aviation industries.

Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding the investment that would fully fund the company through its deployment and commercial launch. While it 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. By filing for relief under the Chapter 11 Bankruptcy Code, the company intends to use these proceedings to pursue a sale of its business in order to maximize the value of the company.

This demand for connectivity delivered from low Earth-orbiting satellite constellations underscores the tremendous need for high-quality connectivity, especially for rural and under-connected communities worldwide. The OneWeb ecosystem had transformed the satellite industry introducing innovative new technologies and operational advances. These developments fundamentally changed the economics of satellite communications, opening up new markets such as cellular backhaul and connectivity on the move.

The company has filed a number of customary motions with the U.S. Bankruptcy Court seeking authorization 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 U.S. Bankruptcy Code. Together, these actions will allow the company to meet post-petition obligations to its remaining employees and certain vendors in the ordinary course.

Adrian Steckel, Chief Executive Officer of OneWeb stated that OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere. The current situation is a consequence of the economic impact of the COVID-19 crisis. The company thus remains convinced of the social and economic value of its mission to connect everyone everywhere. He hopes the current measures will allow to carve a path forward that leads to the completion of the mission, building on the years of effort and the billions of invested capital.

Click here for more information about OneWeb’s Chapter 11 case.

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