OneWeb, the London-based venture that launched its latest batch of broadband internet satellites last weekend, filed for Chapter 11 bankruptcy protection in New York today.
“The company intends to use these proceedings to pursue a sale of its business in order to maximize the value of the company,” OneWeb said in a news release.
OneWeb has 74 satellites in low Earth orbit, and half of its 44 planned ground stations have been completed or are in development. It was planning to begin offering broadband internet access in the Arctic as soon as this year, and broaden its service to the entire globe with hundreds of satellites over the next year or so. All those plans are now up in the air.
Speaking on condition of anonymity, a source who’s familiar with the situation told GeekWire that OneWeb wasn’t able to arrange further financial support from SoftBank Group, one of its biggest backers. The source said substantial numbers of employees were laid off today, but didn’t provide the numbers.
In its news release, OneWeb confirmed that it was facing a financial squeeze, primarily due to effects of the global coronavirus outbreak. “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,” it said.
The petition filed in Southern New York Bankruptcy Court lists the company’s 30 biggest creditors. The top creditor on the list is Arianespace, with an unsecured claim of more than $238 million. There’s also a Seattle-area company among the creditors: Woodinville, Wash.-based Redapt, which has a claim of $662,275.85.
OneWeb said it’s asking the court for authorization to continue operations during the Chapter 11 process, using its existing cash collateral. It also said it’s in negotiations for “debtor-in-possession financing.” If the court approves such an arrangement, OneWeb could fund additional financial commitments as it goes through the sale process. “Together, these actions will allow OneWeb to. meet post-petition obligations to its remaining employees and certain vendors in the ordinary course,” the company said.
In a statement, OneWeb CEO Adrian Steckel said that today was “a difficult day.”
“So many people have dedicated so much energy, effort and passion to this company and our mission,” Steckel said. “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.”
OneWeb’s financial setback boosts the status of SpaceX’s Starlink constellation as the front-runner in a competition to beam more ubiquitous broadband to underserved markets (and the U.S. military) from low Earth orbit.
Starlink satellites are built at SpaceX’s facilities in Redmond, Wash., not far from where Amazon’s Project Kuiper is laying the groundwork for yet another broadband satellite constellation.