Abu Dhabi wealth fund joins bid for bankrupt satellite firm OneWeb
The Government is in talks with a £185bn United Arab Emirates sovereign wealth fund about pumping millions into a British offer for the bankrupt satellite operator OneWeb.
The UK is in late discussions with Abu Dhabi’s Mubadala, one of the oil-rich Gulf nation’s biggest funds, about joining the consortium bidding for OneWeb.
The auction for the Anglo-American company is taking place on Thursday and a winner could be announced as soon as Friday.
Any investment from Mubadala would be likely to amount to hundreds of millions of pounds. Boris Johnson has signed up to putting as much as $500m (£400m) into a 20pc stake in OneWeb, and the Indian telecoms giant Bharti Enterprises is also involved in the British-backed consortium, but further investment is likely to be needed when rescuing OneWeb.
On Thursday it emerged that SoftBank, the Japanese conglomerate that was OneWeb’s biggest investor before it went bust in March, could also back the bid. SoftBank, which owned 37pc of OneWeb, has held talks with UK officials about joining, Sky News reported.
The Telegraph understands that the Canadian government is considering providing financial backing for a rival bid from Ottawa-based telecoms company Telesat, which has emerged as the main competitor to a British consortium.
OneWeb attracted billions of dollars in funding for plans to build a “mega constellation” of satellites that would beam internet to far-flung corners of the globe, but launched just 74 satellites into orbit before funding dried up, and SoftBank refused to pump further cash into the company.
The Government is believed to be interested in the project both as a way of boosting rural broadband coverage and of launching a satellite navigation system that would rival the EU’s Galileo project and America’s GPS.
It is hoped a bid would be a statement of British commitment to space. However, experts have raised concerns about whether OneWeb's satellites would be suited to a navigation system.
Involvement from Abu Dhabi about a UK space project may attract attention over the country’s human rights record. The country has been criticised for stifling freedom of speech, labour abuses suffered by migrant workers and the torture of prisoners. In 2018, a British academic was sentenced to life in prison in Abu Dhabi for allegedly spying on behalf of the UK, although he was released after almost six months.
Mubadala already owns satellite internet and TV company Yahsat, which has five satellites in orbit, and may seek tie-ups between the two companies.
SoftBank was OneWeb’s biggest backer, helping it raise a total of $3.4bn in debt and equity. But in March, hours before OneWeb launched its latest set of satellites, it pulled the plug on a $2bn funding round.
The collapse leaves SoftBank as OneWeb’s largest secured creditor, with $913m in notes. It has continued to support OneWeb through bankruptcy with “debtor in possession” financing, a loan to help the firm find a buyer. Creditors were due to vote on their preferred bid in a law firm’s office in New York on Thursday.
Any bid would be likely to require the approval of the White House, according to bankruptcy court filings last week. OneWeb’s US manufacturing presence in Florida means the US committee on foreign investment in the United States, which has blocked Chinese takeovers of American companies, has a veto on any deal to a foreign buyer.
The Department for Business, Energy and Industrial Strategy said: "We have made clear our ambitions for space and are developing a new National Space Strategy to bring long-term strategic and commercial benefits to the UK. We are in regular discussions with the space industry as part of this work."
OneWeb, SoftBank and Mubadala did not comment.
