MT LAUREL, New Jersey — OneWeb officially called off its planned merger with Intelsat the evening of June 2 after the final deadline for a debt swap passed without enough support.
After three May deadline extensions that failed to convince the requisite number of bondholders, Intelsat terminated the debt exchange and said it expected the merger, along with a share purchase agreement with Japanese telecom giant SoftBank to collapse as well. Those had a deadline of 5 p.m. EDT Saturday.
“While we were excited about the prospects of working even more closely with our shareholding partner Intelsat, OneWeb remains on the fast track to bridge the digital divide,” OneWeb founder Greg Wyler said in a June 2 statement. “In just a few weeks, we will inaugurate the world’s first fully digital satellite production line in Toulouse, France. About 10 months later, we will begin launching our Ultra-Compact, Ultra-High throughput satellites which will shatter historical mass/performance records for small satellites with just over 13kg of mass per Gbps of capacity.”
Intelsat was never able to get a minimum threshold of 85 percent of bondholders to agree to the terms of a debt exchange that SoftBank, having already invested $1 billion into OneWeb in December, made a prerequisite to approving the merger. The share purchase agreement was worth $1.7 billion, which combined with the debt swap would have curbed Intelsat’s $14.5 billion debt by around $3.6 billion.
“There were many stakeholders’ interests that needed to be satisfied in this complex transaction, Intelsat CEO Stephen Spengler said in a prepared statement June 1. “We are disappointed that our bondholders were unwilling to accept the terms of the exchange offers presented over the course of this process.”
Without the merger, Intelsat and OneWeb still intend to collaborate on making their respective geosynchronous and low-Earth orbit constellations interoperable. Intelsat invested $25 million in OneWeb in 2015.
OneWeb is building a first generation constellation of 900 satellites with the goal of bringing internet access to the entire world by 2027. In a June 1 telephone interview, Wyler told SpaceNews that other established satellite operators have shown interest in merging with OneWeb, and that a similar combination with a geostationary fleet could happen in the future.
“This was an opportunity that OneWeb was pursuing,” Wyler said of the Intelsat merger. “OneWeb is still on a great track and making fantastic progress, and we may or may not find other partners along the way.”