OneWeb files Chapter 11 bankruptcy to sell business, cites Covid-19

By Caroline Salls

Pittsburgh, March 30 – OneWeb Global Ltd. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Southern District of New York to complete a sale of its business in order to maximize the value of the company, according to a news release.

OneWeb said it had been in advanced negotiations since the beginning of the year regarding investment that would fully fund the company through its deployment and commercial launch. However, while it was close to obtaining financing, the company said the process did not progress because of the financial impact and market turbulence related to the spread of Covid-19.

The company filed a number of customary motions seeking court approval 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 said it is actively negotiating debtor-in-possession financing, which, if acquired and approved by the bankruptcy court, will ensure it is able to fund additional financial commitments as it conducts a court-supervised sale process. Together, the company said these actions will allow OneWeb to meet post-bankruptcy obligations to its remaining employees and some vendors in the ordinary course.

“We remain convinced of the social and economic value of our mission to connect everyone everywhere,” chief executive officer Adrian Steckel said in the release. “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.”

According to court documents, OneWeb has $1 billion to $10 billion in both assets and debt.

The company’s largest unsecured creditors are Arianespace of Evry-Courcouronnes, France, with a $238.14 million trade claim; Qualcomm Technologies Inc. of Los Angeles, with an $8 million trade claim; Deloitte Touche Tohmatsu Ltd. of Dallas, with a $6.86 million professional claim; Hughes Network Systems, LLC of Baltimore, with a $5.35 million trade claim; Deutsche Bank of New York, with a $5.2 million trade claim; Wipro Ltd. of East Brunswick, N.J., with a $2.47 million trade claim; Willis Towers Watson plc of New York, with a $1.9 million insurance claim; and Viasat of Los Angeles, with a $1.23 million trade claim.

Softbank Group Corp. owns 37.41% of OneWeb’s equity, Qualcomm Global Trading Pte. Ltd. owns 15.93%, and 1110 Ventures, LLC owns 11.94%.

Milbank LLP is serving as OneWeb’s legal counsel, FTI Consulting is serving as its restructuring adviser, and Guggenheim Securities, LLC is serving as its financial adviser.

Arlington, Va.-based OneWeb develops a constellation of satellites to enable internet access. The Chapter 11 case number is 20-22437.

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