Intelsat Anticipates Termination of OneWeb Merger
The agreement to merge startup OneWeb with satellite operator Intelsat has fallen through, Intelsat announced, because its bondholders failed to accept the proposed bond exchange deal before the May 31 deadline.
Last December, Japanese telecommunications company SoftBank Group committed to invest $1 million to support the construction of OneWeb’s satellite production facility. To help offset Intelsat’s $15 billion debt load, Softbank also pledged a $1.7 billion stake in the combined Intelsat/OneWeb company had the deal been completed.
However, Intelsat stated on June 1 that the conditions for the merger had not been satisfied, despite the company pushing back the deadline for its bondholders multiple times. As a result, Intelsat currently expects that OneWeb and SoftBank will exercise their termination rights under the combination agreement on June 2.
Still, Intelsat Chief Executive Officer (CEO) Stephen Spengler noted that OneWeb and Intelsat will likely work together in the future to provide combined solutions with their respective fleets.
“There were many stakeholders’ interests that needed to be satisfied in this complex transaction. We are disappointed that our bondholders were unwilling to accept the terms of the exchange offers presented over the course of this process. Even without a merger of our companies, the pre-existing commercial agreement among Intelsat, OneWeb and SoftBank will continue. Under this agreement, we plan to jointly develop integrated solutions utilizing both of our fleets and to act as a sub-distributor to SoftBank for the attractive application segments of mobility, energy, government, and connected car,” Spengler said in a statement.