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As anticipated, the proposed merger between Intelsat and Jersey-based satellite constellation OneWeb has been pulled.
Intelsat, in a statement issued early on June 1st, said that not enough of its bond-holders had agreed the terms of the SoftBank-enabled financial restructuring to make the scheme work. Intelsat needed an 85 per cent acceptance level of the new terms on offer, and by the midnight May 31st deadline acceptance levels were short of this amount.
Intelsat’s president/CEO Stephen Spengler, said he was disappointed by the result. “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.”
However, as expected, he outlined that a relationship would continue with OneWeb. “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. As we create integrated services for these applications, we expect to accelerate and enhance our goal of unlocking new and larger opportunities in the communications landscape. We remain focused on achieving our operating priorities for 2017, including the continued commercialization of our Intelsat Epic high throughput satellite services.”
What will now interest the market is whether Japan’s SoftBank introduces another satellite operator – perhaps without the massive debt burden being carried by Intelsat, to replace Intelsat and merge with OneWeb.