OneWeb has filed for Chapter 11 bankruptcy as it searches for a new buyer to continue its satellite internet ambitions.
The satellite startup was forced into bankruptcy after attempts to secure fresh financing proved unsuccessful.
OneWeb reports that it had been “close” to finalizing the critical funding, but the sudden economic disruption caused by the coronavirus pandemic derailed the prospective deal amid severe market turbulence.
Filing under Chapter 11 allows OneWeb to continue operating while seeking a buyer, using debtor-in-possession financing and court-supervised procedures to manage assets and potentially sell the business.
The restructuring will result in staff reductions. OneWeb has not provided a specific number of positions affected but has referred to its “remaining employees” in public statements.
Adrian Steckel, Chief Executive Officer of OneWeb, said:
“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.”
Chapter 11 does not necessarily mark the end of OneWeb. Many companies have emerged from similar restructurings, but the filing places OneWeb in a precarious position that is compounded by broader market uncertainty.
OneWeb faces strong competition in the satellite internet market, notably from SpaceX, but has been viewed as a promising contender. Demonstrations of OneWeb’s system have shown broadband download speeds north of 400 Mbps and latency around 32 ms.
The company planned a constellation of 650 satellites but had launched only 74 at the time of the filing.
“OneWeb has been building a truly global communications network to provide high-speed, low-latency broadband everywhere,” Steckel added. “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.”
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