UK-based satellite internet services provider OneWeb was purchased by one of its existing shareholders, conglomerate Bharti Enterprises, and the UK government on Friday with a winning bid of more than $1bn.
Bharti Enterprises’ UK subsidiary, Bharti Global, and the British government, represented by the Secretary of State for Business, Energy and Industrial Strategy – a position currently held by Alok Sharma – each put in $500m.
Founded in 2012 as WorldVu, OneWeb is building a 650-satellite constellation intended to deliver internet access to customers in rural and remote areas. It is registered in the UK but its manufacturing facilities are located in the United States and it has launched 74 satellites to date.
The deal is subject to regulatory approvals, including by the US Bankruptcy Court, and is expected to close by the end of 2020. The buyers will collaborate with OneWeb on resuming the launch schedule in the meantime.
The company raised a total of $3.4bn in funding but failed to secure additional capital earlier this year and filed for bankruptcy in March. It had sought $2bn in fresh funding, according to the Financial Times.
Reports detailing the UK government’s interest in investing in OneWeb began emerging last month. It will lose access to Galileo, the European Union-owned global navigation satellite system being developed to reduce reliancy on the US military-controlled GPS, once its departure from the union is complete.
Academic researchers have however questioned the feasibility of adapting OneWeb’s communications satellites to deliver positioning technology, as they are both smaller and located in an orbit 16 times lower than Galileo or GPS satellites, The Guardian reported last month.
TechCrunch and The Guardian have placed the size of the stake the UK will acquire in OneWeb at 20%, while the BBC has reported it as 45%.
OneWeb most recently collected $1.25bn in funding in a March 2019 round featuring mobile chipmaker Qualcomm, telecommunications and internet group SoftBank, diversified conglomerate Grupo Salinas (which owns telecoms network operator Totalplay) and the government of Rwanda.
SoftBank had led a $1.2bn round for the company in 2016 that included existing investors Qualcomm, Totalplay, Bharti Enterprises, aerospace manufacturer Airbus, conglomerate Virgin, beverage producer Coca-Cola Company and satellite technology providers Intelsat and Hughes Network Systems.
