OneWeb, in the process of exiting its Chapter 11 bankruptcy restructuring, has ended its controversial joint-venture with Russian Space Agency Roscosmos. OneWeb’s 49 per cent stake would now be transferred to a Roscosmos subsidiary company Gonets which was already the majority partner.
One of the key buyers of OneWeb’s assets is the UK government which will hold a so-called ‘Golden Share’ in One Web. The UK also has a veto over any foreign government lor entity having an investment in OneWeb.
This decision does not affect the launch relationship that OneWeb has through the use of Russian rockets (organised via Arianespace) or the use of Russian launch sites for orbiting OneWeb’s satellites.
However, while the decision currently over Russia is not material in terms of value at the moment, OneWeb has long argued that Russia was a key market for its broadband services. Mikhail Kaigorodov was appointed Commercial Director for Russia on July 16 2019 and at the time said: “I believe OneWeb’s services have the ability to make a positive impact in Russia and bring much needed connectivity throughout Russia. We welcome the Russian Government’s interest in the deployment of Non-Geostationary Orbit (NGSO) constellations, including the recently announced project Sfera. We believe that our system could be a basis for long-term and mutually satisfactory cooperation with Russia which goes beyond currently launching satellites, investing in gateway infrastructure construction, as well as staffing local distribution centers via Russian service providers to Russian customers (ISPs, MNOs and other telcos).”
In 2019 there were widespread reports that Russia was concerned that OneWeb’s satellites might circumvent Russia’s tight grip of internet activity by its citizens.
The relationship between OneWeb and Gonets started off with OneWeb holding 60 percent of the equity in the Russian business, but that was reduced to 49 percent, and which has now been given up.
The secured creditors, mostly investors and suppliers and with some $1.65 billion owed, will receive just 5.9 cents in the bankruptcy settlement but only in the form of new shares. Overall, they will own below 10 per cent of the new company. Unsecured creditors, according to OneWeb, will receive between 14-16.8 per cent of their claims.
One other key element of its restructuring is that OneWeb’s satellite construction joint-venture with Airbus (“Airbus OneWeb Satellites LLC) has been deemed by the bankruptcy court not to be part of the overall OneWeb restructuring, and is not considered an affiliate of OneWeb, according to the Court.