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UK Government consortium led by Bharti wins bid for OneWeb
New Delhi, July 3, 2020
India's Bharti Enterprises today announced that a UK Government consortium led by it had won, through a court-supervised sale process, the bid for acquisition of OneWeb, the communications company whose mission is to bring connectivity to governments, businesses and people everywhere.
A separate announcement by OneWeb said the consortium had committed to provide more than $ 1 billion to acquire the company and fund the full restart of its business operations.
Bharti said in a press release that the deal would enable OneWeb to complete the construction of a global satellite constellation that will provide enhanced broadband and other services to mobile and fixed terminals in countries around the world.
OneWeb was formed with a mission to offer high speed, low latency wireless broadband access to billions of people across the globe, especially in rural areas through a constellation of satellites in low earth orbit. Bharti was one of the founding members of OneWeb and had a strategic stake in the company.
Sunil Bharti Mittal, Chairman Bharti Enterprises said: “I am delighted that Bharti will be leading the effort to deliver the promise of universal broadband connectivity through OneWeb, with the active support and participation of the British Government.”
“In addition to the strategic opportunities across a wide range of other applications and working with a broad range of international partners, this business has substantial commercial use cases across the telecoms, enterprise, aviation and maritime sectors. With strong operational execution, we will be able to generate an attractive return for investors, while ensuring that Britain plays a leading role in space and next generation communications.”
“In addition to these commercial and strategic benefits, OneWeb’s platform will help to reduce the 'digital divide' by providing high speed, low latency broadband access to the poor and hard-to-reach rural areas. A low-earth orbit constellation is the only viable mechanism through which the 'last billion' can be connected. As one of the largest telecoms operators in India and Africa, I know what a powerful social and economic enabler this can be. We will work with partners around the world to deliver this technology to those who need it the most," he said.
“I commend the Bharti Global team - led by Shravin Bharti Mittal - and our partners in the Government for bringing together this strong consortium, and putting together the winning bid, within such a short timeframe.
“On a personal note, I am particularly excited about the opportunity for India and the UK to deepen their cooperation on space. Further, India’s leading edge capabilities in the space program through The Indian Space Research Organisation (ISRO) can be leveraged to accelerate OneWeb’s ambitions," he added.
Herbert Smith Freehills LLP served as the legal counsel and Standard Chartered Bank acted as the financial adviser to Bharti Global Ltd.
In London, OneWeb said in a press release that the bid is designed to capitalise the company sufficiently as a going concern to effectuate the full end-to-end deployment of the OneWeb system.
"Following a competitive process, the consortium’s winning bid represents a strong offer that will enable OneWeb to successfully emerge from the Chapter 11 process with a robust foundation on which to continue its progress towards commercial operations and secure OneWeb’s position as a global leader in low latency connectivity.
"The consortium brings immediate commercial value to OneWeb. Bharti, through Bharti Airtel, is the third largest mobile operator in the world, with over 425 million customers. Bharti Airtel has its own extensive mobile broadband networks and enterprise business, which will act as the testing ground for all OneWeb products, services, and applications. Bharti will contribute significant contract value to OneWeb through its presence across South Asia and Sub-Saharan Africa, where the terrain necessitates the use of satellite-based connectivity, providing a near-term anchor customer for large-scale global deployment of OneWeb’s services," the release said.
According to the release, the commitment of the UK Government accelerates and enhances OneWeb’s global access.
"OneWeb will contribute to the UK government’s ambition to join the first rank of space nations, along with its commitment to making the UK the world’s leader in science and research and development.
"OneWeb remains ready to continue building its communications system to deliver transformative connectivity available everywhere including to businesses and people in remote and rural parts of the world, starting with the Arctic, while also maintaining a strong corporate purpose to do good through its communications and other services.
"OneWeb has always believed that its system has tremendous potential. Demand for a new mix of connectivity services has been underscored during the pandemic, increasing the urgency through which businesses, people, communities must connect and operate," the release said.
The transaction remains subject to approval by the U.S. Bankruptcy Court, as well as regulatory approvals and customary closing conditions. The transaction is expected to close by the fourth quarter of 2020. In the meantime, the purchasing consortium will work with the OneWeb management team to further develop the strategy and business plan and to resume the company’s launch schedule, the release added.