It's hard for me to see how the interests of a UK government looking for national technological pride (and potential GPS replacement) coincide with an Indian private telecom company presumably looking to provide satellite internet to rural Indian customers. It's a weird match, and it's also a bit strange that the UK is trumpeting this as their acquisition, their "sovereign global satellite system" -- are they an equal partner with Bharti Enterprises, since they both kicked in an equal amount for the purchase? And given that the UK and Bharti only own 90% of the company, it seems like the UK may not hold a majority equity stake.
Government sources, however, were insisting that this was a positive move that would guarantee the future of the loss-making company while maintaining UK involvement. They said that the UK will retain a golden share in the company, which gives it a veto over moving OneWeb’s headquarters and a first preference for future manufacturing.
UK and France to get board seats in planned Eutelsat and OneWeb tie-up Bharti will hold a roughly 18 per cent share, according to two people with knowledge of the deal.Eva Berneke, current Eutelsat chief executive, is expected to remain in her post.The UK and French governments are expected to have similar stakes of roughly 10 per cent each. France’s stake will be held through the Banque Publique d’Investissement, a state-backed business development bank.Britain will also retain its golden share in OneWeb, giving it a veto over sales on national security grounds, and rights over the location of the headquarters and over any technology transfer. France will also receive guarantees about the headquarters of Eutelsat.
PRESS RELEASE - 25 JULY 2022 08:49CLARIFICATION FROM EUTELSAT COMMUNICATIONSParis, 25 July 2022 – Following recent market rumors, Eutelsat Communications (Euronext Paris: ETL) confirms that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination to create a global leader in Connectivity with complementary GEO/LEO activities.The combined entity would be the first multi-orbit satellite operator offering integrated GEO and LEO solutions and would be uniquely positioned to address a booming ~$16bn (2030) Satellite Connectivity market. OneWeb is one of the two only global LEO networks and has experienced strong momentum over recent months, with service expected to be fully deployed in 2023.The transaction would represent a logical next step in the successful partnership between Eutelsat and OneWeb, started with Eutelsat’s equity investment in OneWeb in April 2021 and deepened with the Global Distribution Agreement announced in March 2022. Eutelsat currently holds 23% of OneWeb’s share capital, alongside a consortium of high-profile public and private investors.Under the terms of the transaction being discussed, Eutelsat and OneWeb shareholders would each hold 50% of the combined group’s shares.The transaction would be structured as a contribution by OneWeb’s shareholders of their stake in OneWeb to Eutelsat in exchange for newly issued Eutelsat shares. Any combination would be subject to, among other conditions, approval by the requisite majority of Eutelsat shareholders and receipt of all relevant antitrust and regulatory (including foreign investment) approvals.There can be no assurance that these discussions will result in any agreement. Eutelsat will inform the market as soon as soon as there are any new developments.
Investor reaction to the deal was negative on Monday, with Eutelsat shares dropping 18% after announcing deal talks. Shares remained flat on Tuesday. Eutelsat will also suspend its dividend for two years after this year, to help pay for the next generation of OneWeb’s satellite launches.The merger presents concerns around short-term cash burn and government contracts, Deutsche Bank analyst Roshan Ranjit said in a research note.
It doesn’t appear that the deal is very popular with Eutelsat shareholders.Quote Investor reaction to the deal was negative on Monday, with Eutelsat shares dropping 18% after announcing deal talks. Shares remained flat on Tuesday. Eutelsat will also suspend its dividend for two years after this year, to help pay for the next generation of OneWeb’s satellite launches.The merger presents concerns around short-term cash burn and government contracts, Deutsche Bank analyst Roshan Ranjit said in a research note.https://www.bloomberg.com/news/articles/2022-07-26/eutelsat-oneweb-agree-3-4-billion-deal-to-create-spacex-rival
Quote from: Star One on 07/26/2022 08:40 amIt doesn’t appear that the deal is very popular with Eutelsat shareholders.Quote Investor reaction to the deal was negative on Monday, with Eutelsat shares dropping 18% after announcing deal talks. Shares remained flat on Tuesday. Eutelsat will also suspend its dividend for two years after this year, to help pay for the next generation of OneWeb’s satellite launches.The merger presents concerns around short-term cash burn and government contracts, Deutsche Bank analyst Roshan Ranjit said in a research note.https://www.bloomberg.com/news/articles/2022-07-26/eutelsat-oneweb-agree-3-4-billion-deal-to-create-spacex-rivalA further 15% stock price drop today, for a total of a 32% drop overall. A very negative response from capital.
Quote from: RedLineTrain on 07/26/2022 02:42 pmQuote from: Star One on 07/26/2022 08:40 amIt doesn’t appear that the deal is very popular with Eutelsat shareholders.Quote Investor reaction to the deal was negative on Monday, with Eutelsat shares dropping 18% after announcing deal talks. Shares remained flat on Tuesday. Eutelsat will also suspend its dividend for two years after this year, to help pay for the next generation of OneWeb’s satellite launches.The merger presents concerns around short-term cash burn and government contracts, Deutsche Bank analyst Roshan Ranjit said in a research note.https://www.bloomberg.com/news/articles/2022-07-26/eutelsat-oneweb-agree-3-4-billion-deal-to-create-spacex-rivalA further 15% stock price drop today, for a total of a 32% drop overall. A very negative response from capital.I do wonder if this is actually that good a deal. Is it just a response to Starlink and nothing else.
Or maybe "the market" is seeing through what megaconstellations might actually really be, stripping away the varnish: not such a good investment, or even concept.After all, from the horse's mouth: "Starlink V1, by itself, is financially weak". OneWeb as currently conceived is an already-bailed-out, strongly politicized, weak version of Starlink V1.
Quote from: eeergo on 07/26/2022 04:49 pmOr maybe "the market" is seeing through what megaconstellations might actually really be, stripping away the varnish: not such a good investment, or even concept.After all, from the horse's mouth: "Starlink V1, by itself, is financially weak". OneWeb as currently conceived is an already-bailed-out, strongly politicized, weak version of Starlink V1.There is a good technical case for an integrated GEO/LEO system. You can offer global service pretty much immediately from GEO and then build out your LEO gateways to offload the traffic in higher-density areas. This would require suitable terminals and a fair amount of software. I have no idea if OneTelsat (EutelWeb?) could or would try this.
Does folks think the demise of PM Boris Johnson have any effects on the support of OneWeb by the UK government?
