UK company OneWeb, which has now launched 74 satellites as part of its constellation of satellites to provide global internet access, announced that it has filed for bankruptcy in New York after failing to obtain financing amid the coronavirus pandemic.
"OneWeb announced Friday that the Company and certain of its controlled affiliates have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. 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", the statement said.
The company said that although it "was close to obtaining financing", the process had stalled due to the coronavirus outbreak's economic and financial impact.
"Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the Company through its deployment and commercial launch. 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 stated.
OneWeb planned to create a low-Earth Orbit constellation of satellites that would provide broadband internet access to users around the world fully covering the Earth's surface. And so far OneWeb 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.
However the company faces stiff competition from competitors such as Elon Musk’s SpaceX Starlink megaconstellation and Jeff Bezos’s Project Kuiper initiative. Musk has recently been granted a license by the FCC for the use of up to a million ground terminals for his proposed broadband mega-constellation.
As part of the bankruptcy filings, OneWeb is seeking authorisation to support its ongoing operations, including approval for the consensual use of its existing cash collateral to continue to fund the business.
Adrian Steckel, Chief Executive Officer of OneWeb, said of the latest developments; “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 to 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.”