British satellite giant OneWeb plans to raise billions of pounds to fund vast communications network in low orbit
British satellite giant OneWeb plans to raise billions of pounds to fund a vast communications network in low orbit, The Mail on Sunday has learnt.
The start-up, which was bailed out by the taxpayer in 2020, is in talks with a group of banks about the ambitious plan that would help pay for a new generation of launches – known as Gen II. One source said the amount raised would be around £3billion. It is understood the Government’s export credit agency is involved in the discussions, according to City sources.
UK Export Finance (UKEF) provides funds and guarantees to lenders for firms in strategic industries exporting from the UK. The process could also involve France’s state-backed investment bank BPI and the US’s credit export agency.
Ambitious: OneWeb is in talks with a group of banks about the ambitious plan that would help pay for a new generation of launches – known as Gen II
A source said plans are at an early stage and could take nine months or more to finalise. The proceeds would be used to build more of its existing satellites and fund Gen II, more details of which are expected to be unveiled next month.
OneWeb already has 648 low earth orbit satellites whose aim is to provide high-speed internet to the remotest parts of the planet via stronger signals than traditional fixed-satellite systems. Applications include broadband on planes.
The investment plan follows a proposal by French satellite operator Eutelsat to merge with OneWeb – to create a European champion to take on the likes of Elon Musk’s Starlink and Jeff Bezos’s Kuiper.
The proposed merger was poorly received by Eutelstat’s shareholders, with shares tumbling a third on the news back in July. The share price has since regained some of its losses. Eutelsat has said it would set aside up to $5.3billion to complete OneWeb’s network and update its technology over the next seven years.
Sources said the latest plan to raise funds would happen independently of its ongoing merger with Eutelsat. One added that a merger could enhance its chances of securing the debt given Eutelsat’s stable finances.
One adviser to Eutelsat said the market reaction to the merger plan was ‘very bad’ and questioned whether shareholders would approve it. It is understood Eutelsat has since stepped up efforts to convince investors of the plan.
OneWeb’s shareholders include its largest stakeholder Bharti Global, the UK Government and Eutelsat, which all support the deal.
The combined entity, while having its primary listing in Paris, would also be expected to launch a secondary listing in London.
The deal could be completed by the middle of next year following regulatory approval. UKEF declined to comment and OneWeb did not respond.