U.S. markets open in 8 hours 51 minutes

SoftBank’s OneWeb to Consider Bankruptcy as Cash Dwindles

Eliza Ronalds-Hannon, Gillian Tan, Lauren Coleman-Lochner and Giles Turner

(Bloomberg) -- OneWeb, the satellite operator backed by SoftBank Group Corp., is mulling a possible bankruptcy filing to address a cash crunch as it grapples with high costs and stiff competition, according to people with knowledge of the preparations.

The company is considering seeking court protection even as it continues to review possible out-of-court alternatives, said the people, who asked not to be named discussing private company plans.

OneWeb would be among the first SoftBank-backed companies to file for bankruptcy. A spokeswoman for SoftBank, which is OneWeb’s largest investor, declined to comment.

A spokesperson for OneWeb declined to comment.

London-based OneWeb makes so-called low-Earth orbit satellites that provide high-speed communications, and it has raised approximately $3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus SE and Qualcomm Inc. since its inception, according to filings.

It faces high-profile competition, including from Elon Musk’s SpaceX Starlink project and Jeff Bezos’s Amazon-linked Project Kuiper effort, while incumbents in the space include Inmarsat, Intelsat SA and Eutelsat Communications SA. And while the technology is in its early stages, the business is subject not only to high startup costs but an uncertain regulatory environment.

On that front, SoftBank has ramped up lobbying efforts in Washington, Bloomberg has reported, including in support of measures that would allow OneWeb to provide Internet access from more of its satellites.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.