Eutelsat OneWeb: Constellation - General Thread

[ZachF]

If they could basically get it for the cost of completing the constellation, it could make sense for Amazon or Telesat to look into a takeover.   edit: But only if they can get rid of the Intelsat entanglement.

The OneWeb cost/ownership/investment/etc structure is so byzantine that OneWeb might be worth negative money.

[ChrisWilson68]

If they could basically get it for the cost of completing the constellation, it could make sense for Amazon or Telesat to look into a takeover.   edit: But only if they can get rid of the Intelsat entanglement.

The OneWeb cost/ownership/investment/etc structure is so byzantine that OneWeb might be worth negative money.

A bankruptcy filing is saying that it is worth negative money.  The hope of the bankruptcy filing is to change it to be worth positive money by changing the structures that make it worth negative money.

[RedLineTrain]

According to LinkedIn, OneWeb had 500+ employees and OneWeb Satellites had 200+ employees.

[ulm_atms]

If they could basically get it for the cost of completing the constellation, it could make sense for Amazon or Telesat to look into a takeover.   edit: But only if they can get rid of the Intelsat entanglement.

The OneWeb cost/ownership/investment/etc structure is so byzantine that OneWeb might be worth negative money.

A bankruptcy filing is saying that it is worth negative money.  The hope of the bankruptcy filing is to change it to be worth positive money by changing the structures that make it worth negative money.

While true for a business with um well...business...This one is a little different.  Restructuring does nothing if they have no income at all.  Without VCs to fund them till they actually have a business...I don't see how this doesn't get converted to liquidated bankruptcy.  This feels like a last gasp to try and find any people willing to invest at this point.

[ChrisWilson68]

If they could basically get it for the cost of completing the constellation, it could make sense for Amazon or Telesat to look into a takeover.   edit: But only if they can get rid of the Intelsat entanglement.

The OneWeb cost/ownership/investment/etc structure is so byzantine that OneWeb might be worth negative money.

A bankruptcy filing is saying that it is worth negative money.  The hope of the bankruptcy filing is to change it to be worth positive money by changing the structures that make it worth negative money.

While true for a business with um well...business...This one is a little different.  Restructuring does nothing if they have no income at all.  Without VCs to fund them till they actually have a business...I don't see how this doesn't get converted to liquidated bankruptcy.  This feels like a last gasp to try and find any people willing to invest at this point.

I agree with you that I think there's little chance OneWeb will survive.

But I would take issue with the blanket characterization that a company can't restructure unless it has current revenue.

A company can successfully emerge from bankruptcy if it can demonstrate that it will make money in the future.  Even if it needs $10 billion in investment, if it can demonstrate that it will make enough money after that to pay back the investment with enough profit on top to be worth the investment, then it will get that investment and emerge from bankruptcy.

What bankruptcy does is allow a company to get out of current obligations.  That can be debt or contracts of any sort that hobble it.

With OneWeb, I doubt they will convince people with enough money to fund it to do so, even after being let out of their current debt and contractual obligations.  But they have to try.  They might as well attempt Chapter 11 and try to save something.  There's nothing for them to lose by trying.  If they fail, it will be Chapter 7 liquidation and the remaining assets will be auctioned off.

[gosnold]

If Oneweb closes, Airbus will likely buy off the 50% Oneweb share in the Florida satellite factory for cheap.

[RocketGoBoom]

Some people have been saying that only Jeff Bezos might be interested for the spectrum rights. But the more I have been thinking about this, the less I think Bezos/Amazon will do anything about OneWeb.

1) OneWeb has a very high cost structure per Gbps of capacity. When you do the math of cost per satellite (8 Gbps each) and launch cost per satellite (34 satellites per launch), the cost per Gbps (build plus launch) is 6x more expensive than SpaceX Starlink. OneWeb's constellation is not even remotely competitive on a cost per Gbps of capacity in orbit.

2) If Jeff Bezos / Amazon were to takeover OneWeb cheaply in bankruptcy, they would have to finish the OneWeb constellation with the current design and the current ITU application. Bezos/Amazon would have to adopt the high cost per Gbps structure as their own.

3) SpaceX is likely to be only successful constellation to finish getting everything into orbit on schedule. Telesat is the only other one with financing support from the Canadian government and some pension funds in Canada. But they have not yet even selected the company to build their satellites. And their cost structure is also likely to be way higher than SpaceX's. The failure of OneWeb may even cause Telesat to reconsider their own plans.

4) If everyone else is failing except SpaceX, then Bezos/Amazon doesn't really need to do OneWeb to catchup. Amazon Kuiper can take their time and be the second constellation into LEO. Their rights to Ku and Ka band spectrum will be sufficient if there are only two major players with LEO constellations.

[ChrisWilson68]

According to Michael Sheetz, Softbank is entirely cutting OneWeb loose.  So no prepackaged bankruptcy with Softbank injecting capital.

https://www.cnbc.com/2020/03/27/softbank-to-let-internet-satellite-company-oneweb-file-for-bankruptcy.html

Softbank invested $2 billion of the $3.4 billion total.

So if I had $1.4B burning a hole in my pocket, I could buy Oneweb and complete the constellation?

No, the $1.4 billion isn't the amount it would take to finish the constellation.  It's the amount that has already been invested in OneWeb by the other investors besides Softbank.

[ChrisWilson68]

The bankruptcy filing is now official.  Here's the statement from OneWeb:

https://www.prnewswire.com/news-releases/oneweb-files-for-chapter-11-restructuring-to-execute-sale-process-301031259.html

[ChrisWilson68]

Some quotes from OneWeb's announcement:

LONDON, March 27, 2020 /PRNewswire/ -- OneWeb ("OneWeb," "the Company"), the global communications company with a mission to bring connectivity to everyone everywhere, announced today that the Company and certain of its controlled affiliates have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The Company intends to use these proceedings to pursue a sale of its business in order to maximize the value of the company.

It's interesting that the announcement comes from London but the filing is in New York.

Also note that their plan is to try to sell the business.

Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the Company through its deployment and commercial launch. 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.

OneWeb is 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 as it conducts a sale process under Section 363 of the U.S. Bankruptcy Code.

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.

[ChrisWilson68]

Here's the actual legal filing:

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47378/808974_437-1.pdf

[ChrisWilson68]

Some interesting tidbits from the filing:

Why is the case filed in this
district?

A bankruptcy case concerning debtor’s affiliate, general partner, or partnership is pending in this district.

I'm guessing that this means the satellite manufacturing company.  Maybe because the manufacturing is done by a US company, they are filing for bankruptcy protection for both the overall company and the manufacturing company and because one of the companies is a US company they can both file in the same US bankruptcy court.

The document lists the company's address as a location in London.

After any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.

Estimated number of
creditors

1,000-5,000

Estimated assets $1,000,000,001-$10 billion

Estimated liabilities $1,000,000,001-$10 billion

Declaration and signature of
authorized representative of
debtor

Thomas Whayne

Insert Batman joke here

each of the entities listed below (collectively, the “Debtors”) filed a
voluntary petition for relief under chapter 11

[...]

1021823 B.C. LTD
Network Access Associates Limited
OneWeb ApS
OneWeb Chile SpA
OneWeb Communications Limited
OneWeb G.K.
OneWeb Global Limited
OneWeb Holdings LLC
OneWeb Limited
OneWeb Ltd
OneWeb Network Access Holdings Limited
OneWeb Norway AS
WorldVu Australia Pty Ltd.
WorldVu Development LLC
WorldVu JV Holdings LLC
WorldVu Mexico, S. DE R. L. DE C.V.
WorldVu Satellites Limited
WorldVu South Africa (Pty) Ltd.
WorldVu Unipessoal Lda

The list of unsecured creditors is led by Arianespace at $238,137,447.58.

The list of shareholders is topped by Softbank, with 37.41% and Qualcomm with 15.93%.  Airbus has 8.5%.  Echostar has 2.57% and Intelsat 1.29%.

[ChrisWilson68]

If Oneweb closes, Airbus will likely buy off the 50% Oneweb share in the Florida satellite factory for cheap.

Why?  The satellite factory is set up to build a particular kind of satellite for OneWeb at a high volume.  I doubt it would be fit for any other kind of satellite construction.  Unless someone else wants to invest billions to finish OneWeb's constellation, it's likely that the the machinery in the factory will be sold off.

[russianhalo117]

If Oneweb closes, Airbus will likely buy off the 50% Oneweb share in the Florida satellite factory for cheap.

Why?  The satellite factory is set up to build a particular kind of satellite for OneWeb at a high volume.  I doubt it would be fit for any other kind of satellite construction.  Unless someone else wants to invest billions to finish OneWeb's constellation, it's likely that the the machinery in the factory will be sold off.

The JV was structured so that Airbus reaps the benefits from development and lessons learned. Airbus is developing its own commercial constellations in imaging, intelligence, etc so they are most suitable to buy IMO.

[Yggdrasill]

2) If Jeff Bezos / Amazon were to takeover OneWeb cheaply in bankruptcy, they would have to finish the OneWeb constellation with the current design and the current ITU application. Bezos/Amazon would have to adopt the high cost per Gbps structure as their own.

Would they, though? I suspect it's not as clear-cut as this.

I don't think the OneWeb constellation will be finished, but I was thinking maybe you'd see something like SpaceX buying OneWeb and adding the OneWeb satellites to the Starlink constellation. They could accelerate getting to a minimum viable product.

Or Amazon could buy OneWeb, add the satellites to Kupier and renegotiate the spectrum rights in some way to fit Kupier.

Not sure how fixed the spectrum rights and the permits for the satellites actually are, but I think deorbiting the satellites would be a major waste.  They have some utility (just not equivalent to what OneWeb has paid to build and put them into orbit).

[ChrisWilson68]

I don't think the OneWeb constellation will be finished, but I was thinking maybe you'd see something like SpaceX buying OneWeb and adding the OneWeb satellites to the Starlink constellation. They could accelerate getting to a minimum viable product.

No, this wouldn't accelerate getting Starlink to a minimal viable product at all.  The Starlink initial constellation is put into orbits that guarantee no gaps.  The OneWeb satellites are in different orbits that don't slot in with the Starlink satellites.  There would be times that you'd have both Starlink and OneWeb satellites visible and times you wouldn't have either visible until all the minimal Starlink constellation was in place.  And the user terminals already designed to talk to Starlink satellites would have to be redesigned to talk to OneWeb satellites.  And you'd need special operations systems to control the OneWeb satellites and ground stations to manage their uplinks.  I don't think it would help SpaceX in any way.

[DaveMorgan]

Are they going to continue orbit raising for the recently launched satellites?
It would seem more responsible to leave them in a low orbit until company future secured.

[StarryKnight]

I don't understand the cost structure of a company like Oneweb.
But I see:
The satellites are built in Florida, alternately launched in Kourou (South America), Baikonur (Kazakhstan) and Vostochniy (Siberia). It doesn't get any further apart.
Transported in special RUAG containers (max. 8 satellites per container)
So far 11 of these containers have been flown to Baikonur.
The repeated changing of the launch place will never result in a continuous round-trip transportation.
A logistical nightmare.
If the rest is like that, nobody will invest.

It's not like the containers are not one time use only. This is very common for most manufacturers who need to build satellites that have to be compatible with multiple launch vehicles. If they're like any other satellite manufacturer, they would ship the GSE needed for launch site operations in another container and fly the GSE and satellites on the same airplane then fly the GSE and empty container back after the launch.

[Nomadd]

Are they going to continue orbit raising for the recently launched satellites?
It would seem more responsible to leave them in a low orbit until company future secured.

The longer they remain in low orbit, the harder they'll be to raise. As long as they retain enough fuel to de-orbit and have some hope of being used, I'd think they'd continue raising them, since they become less valuable as the low orbits decay.

[RocketGoBoom]

There were about 54 launches on the Arianespace manifest according to recent news reports.
If nobody finishes OneWeb, this is a major blow for Arianespace. They just lost 1/3 of their manifest and they have $238 million in accounts receivables due from OneWeb.

18 of those launches were for OneWeb, which just filed for bankruptcy. If my count is correct, 17 of the remaining launches were for Soyuz and the final launch was planned for the debut launch of Ariane 6.

Arianespace was listed as the largest creditor in the bankruptcy filing at $238 million.

I suspect there are lot of partially finished Soyuz rockets somewhere available for discount launches.