Current situation is a consequence of the economic impact of the COVID-19 crisis, CEO confirms.

Satellite communications firm OneWeb has filed for bankruptcy under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.

The company cited the impact of COVID-19 pandemic for its inability to stay afloat.

Prior to filing for bankruptcy, OneWeb had launched 74 satellites as part of its constellation, secured valuable global spectrum, and begun development on a range of user terminals for a variety of customer markets.

OneWeb had also raised over US$3-billion from investors, including the government of Rwanda, to beam broadband internet from space.

The company was also in negotiations with Softbank to secure further investment to support deployment and commercial launch, but this was unsuccessful.

“While the company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19,” it stated.

In its filings with the U.S. Bankruptcy Court, OneWeb is seeking authorisation to support its ongoing operations, including approval for the consensual use of its existing cash collateral to continue to fund the business.

The company said it is also actively negotiating debtor-in-possession financing, which, if acquired and approved by the Bankruptcy Court, will ensure OneWeb is able to fund additional financial commitments.

Adrian Steckel, CEO of OneWeb, said: “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. 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.”