- General
- September 12, 2020
- 3 minutes read
Virgin Orbit Rows With OneWeb
Photo credit: Virgin Orbit Virgin Orbit, a satellite launch provider that’s part of the Virgin Group, is in an apparent…
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| Photo credit: Virgin Orbit |
Virgin Orbit, a satellite launch provider that’s part of the Virgin Group, is in an apparent row over monetary payments with OneWeb, a satellite internet operator being bailed out by investors after bankruptcy. Virgin Orbit is seeking a $46 million payout from OneWeb after the company canceled dozens of launches that it had ordered from Virgin back in 2015. Virgin Orbit is demanding that OneWeb pays it a termination fee that was agreed as part of the contract between both parties. OneWeb fell into bankruptcy earlier this year even after raising up to $3 billion in private funding from investors including Virgin Group. Following its bankruptcy, a rescue package for the company was put in place by the U.K. Government and Indian telecom company Bharti Global, with both parties agreeing to pony up $500 million each for respective 45% stakes in OneWeb as part of a restructuring. Previous OneWeb investors apparently lost significantly, with Bharti and the U.K. Government now set to be in control of OneWeb.
OneWeb has terminated 35 out of 39 satellite launches that it ordered from Virgin Orbit back in 2015. The plan was to launch dozens of OneWeb satellites into orbit using rockets fired from modified Boeing 747 jumbo jets operated by Virgin. After encountering financial issues, OneWeb resorted to canceling most of its orders and jeopardizing the agreement between both parties in the process, and Virgin Orbit’s battle could present a significant obstacle to its restructuring that is currently in the works. Altogether, OneWeb owes more than $2 billion to lenders, who are, however, only set to recoup a small fraction of the money being owed. Virgin Orbit actually took OneWeb to court over the matter last year, but proceedings were put to a stop after Japanese investor SoftBank, one of OneWeb’s biggest investors, refused to put more money into the company.
Already, OneWeb has warned that challenges from creditors could jeopardize its rescue package and restructuring at the hands of Bharti Global and the U.K. Government.
