OneWeb has filed for Chapter 11 bankruptcy as it seeks a new buyer to continue its satellite internet ambitions.
The promising startup was forced into filing for bankruptcy after its attempts to get financing was unsuccessful.
OneWeb says it was “close” to receiving the crucial financing but the unexpected coronavirus pandemic resulted in the prospective deal being cut short amid market turbulence.
Chapter 11 bankruptcy allows OneWeb to keep its existing work going by allowing the startup to use debtor-in-possession proceeds to sell its business.
Unfortunately, the filing will result in redundancies. OneWeb hasn’t specifically estimated how many jobs are at risk but has referenced “remaining employees” to the media.
Adrian Steckel, Chief Executive Officer of OneWeb, stated:
“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 will likely mean OneWeb’s story isn’t over yet. Companies have recovered from such filings but there’s no doubt the company is now in a precarious a position that’s only amplified by wider market jitters.
OneWeb has stiff competition in the satellite internet space from the likes of SpaceX but it has always been a promising contender. Demonstrations of its system delivered broadband speeds in excess of 400Mbps and latency of 32ms.
The company planned to launch 650 satellites but, as of yet, has only launched 74.
“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere,” says Steckel. “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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