SoftBank Allowed OneWeb to File for Bankruptcy

As the largest shareholder of internet satellite company OneWeb, SoftBank had been the one to decide to let the companyfile for bankruptcy.

OneWeb filed for Chapter 11 bankruptcy this past Friday when the markets closed in New York at 4 p.m. ET.

OneWeb had raised $3.4 billion in capital with Qualcomm, Airbus, Virgin Group, Coca-Cola, Maxar Technologies, Hughes
Communications and Intelsat as investors. SoftBank has already invested $2 billion into the company.

CEO Adrian Steckel told CNBC in a February interview that the company “is always raising” money.

“We’re constantly raising capital,” Steckel said, just after the company’s second launch. “We’re not being public about what we’re raising. When the time comes we’ll make an announcement.”

The Financial Times was the first to report that the company would file for bankruptcy.

Softbank had recent discussions to bail out the company but decided it couldn’t afford to spend billions more as it looks to shore up its balance sheet. It seems CEO Masayoshi Son has learned lessons from the WeWork fiasco.

OneWeb said it “voluntarily filed for relief under Chapter 11 of the [US] Bankruptcy Code,” and “intends to use these proceedings to pursue a sale of its business in order to maximize the value of the company.”

OneWeb “said it laid off about 85 percent of its 531 employees prior to filing for bankruptcy.”

The company made the decision “after failing to secure new funding from investors including its biggest backer SoftBank,” largely because of the coronavirus pandemic, the Financial Times wrote. OneWeb also “axed most of its staff on Friday,” the Financial Times article read.