OneWeb appeals to Government. The SoftBank-backed satellite firm has turned to the UK government for support as it seeks a lifeline
Oneweb has appealed to the Government for a rescue loan as the bankrupt satellite business hunts for a lifeline after a planned investment from Japanese giant SoftBank collapsed.
The British satellite company, which filed for Chapter 11 protection in the US, has held talks on whether a state-backed loan could provide urgent funding needed to revive the business.
In a letter to Downing Street, OneWeb is understood to have offered to move its entire operations from Florida to Britain. Ministers were told that transforming the business into a UK-centric operation could address ongoing security concerns about Britain’s telecoms network and deliver on the Government’s pledge to bring faster broadband to rural areas by 2025. Meanwhile, a warning was issued that without a taxpayer-backed loan, OneWeb’s cutting-edge technology could fall into foreign hands, sources said.
The rescue cash would be just a fraction of the hundreds of millions of pounds OneWeb would need to continue its plans for 600 broadband satellites and dozens of rocket launches. Last month, SoftBank, OneWeb’s biggest investor, pulled the plug on a planned deal that would have pumped $2bn into the company.
Sources said Government backing could prompt other investors to join a bailout deal for the start-up, which is headquartered in White City with a factory in Florida. OneWeb has been forced to lay off about 90pc of its 500 staff. A OneWeb spokesman said: “OneWeb is exploring a range of options but cannot comment on any specific discussion.”
The Government has launched schemes for businesses affected by coronavirus that are in need of funding with loans ranging from £5m to £25m. OneWeb, however, was generating little revenue and has burned through billions of pounds for rocket launches.
A government spokesman said: “The government put together a far-reaching package of support to help businesses and their employees through this very challenging time. We are in regular discussions with the space industry, including OneWeb, on how best it can be supported.”
OneWeb, founded in 2012, had been planning to launch a global broadband network using low orbit satellites. It spent more than $3bn (£2.4bn) on building satellites, buying spectrum and rocket launches. However, even as it launched 34 new satellites, Japanese investor SoftBank pulled vital funding support. OneWeb cited coronavirus uncertainty with the deal’s collapse.
While sources close to OneWeb remain confident of finding new investors, analysts are cautious. Quilty, which monitors the space sector, warned it was “unlikely” a strategic buyer would step forward. OneWeb appeals to Government