UK satellite giant OneWeb launches bid to raise billions
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British satellite giant OneWeb plans to raise billions of pounds to fund a massive communications network in low-Earth orbit
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British satellite giant OneWeb plans to raise billions of pounds to fund a massive communications network in low Earth orbit, The Mail on Sunday has learned.
The start-up, which was bailed out by taxpayers in 2020, is in talks with a group of banks about the ambitious plan that would help pay for a new generation of launches – known as Gen II. A source said the amount raised would be around £3 billion. It is clear that the government’s export credit agency is involved in the discussions, according to sources in the city.
UK Export Finance (UKEF) provides funds and guarantees to lenders for companies in strategic sectors exporting from the UK. The lawsuit may also involve state-backed French investment bank BPI and the US credit export agency.
Ambitious: OneWeb is in talks with a group of banks about the ambitious plan that would help pay for a new generation of launches – known as Gen II
A source said the plans are at an early stage and could take nine months or more to finalize. The proceeds would be used to build more of its existing satellites and fund Gen II, with more details expected to be revealed next month.
OneWeb already has 648 satellites in low Earth orbit, which aim to provide high-speed internet to the most remote parts of the planet via stronger signals than traditional fixed satellite systems. Applications include broadband in aircraft.
The investment plan follows a proposal by French satellite operator Eutelsat to merge with OneWeb – to create a European champion to compete against Elon Musk’s Starlink and Jeff Bezos’s Kuiper.
The proposed merger was poorly received by Eutelstat’s shareholders, with the stock tumbling a third in the news in July. The share price has since recouped some of its losses. Eutelsat has said it would spend up to $5.3 billion over the next seven years to complete OneWeb’s network and update the technology.
Sources said the latest fund-raising plan would happen independently of the pending merger with Eutelsat. One added that a merger could increase its chances of securing debt, given Eutelsat’s stable finances.
An adviser to Eutelsat said the market reaction to the merger plan was “very bad” and wondered whether shareholders would approve. It is clear that Eutelsat has since stepped up its efforts to convince investors of the plan.
OneWeb’s shareholders include major stakeholder Bharti Global, the UK government and Eutelsat, all of whom support the deal.
The combined entity, which has its primary listing in Paris, is also expected to launch a secondary listing in London.
The deal could be finalized by mid-next year after regulatory approval. UKEF declined to comment and OneWeb did not respond.