Eutelsat Communications, world’s leading satellite operator, is set to foray into the low orbit (LEO) space through a strategic agreement with prominent OneWeb for the subscription of a c.24% equity share.
It has been speculated that through this deal, Eutelsat is likely to emerge as a leading shareholder of the company alongside the UK Government and Bharti Global. Moreover, Eutelsat would also invest USD 550 million in OneWeb, with closing expected in second half of 2021, subject to regulatory authorizations.
As per reports by Eutelsat Communications, this investment would come with similar governance rights to the UK Government and Bharti Global, including board representation, where its expertise and position will help drive the success of new constellation of OneWeb.
Apparently, the combination of OneWeb’s and Eutelsat’s assets and resources is anticipated to optimize both companies’ commercial potential. This can be attributed to the former’s strong commercial and institutional relationship, global geostationary fleet, and recognized technical expertise, along with OneWeb’s ability to address diverse applications demanding ubiquity and low latency.
Official reports suggest that the investment would be 100% cash funded through Eutelsat’s liquidity position of 1.9 billion euros as at end-March 2021 and USD 507 million US C-Band auction proceeds. The transaction would be accounted for under the equity method.
Speaking on the agreement, Eutelsat’s CEO, Rodolphe Belmer quoted that the organization is thrilled to become a stakeholder and partner in the world renowned OneWeb in the run up to its commercial launch and be a part of the substantial opportunity presented by the non-geostationary segment within the industry.
Rodolphe also mentioned that Eutelsat is looking forward to working with Bharti, the UK Government, and other stakeholders to establish newer and more advanced opportunities and market access to make sure that OneWeb maximizes its potential.
On the other hand, Sunil Bharti Mittal, Executive Chairman at OneWeb, stated that the company is elated to welcome onboard the Eutelsat team. Mr. Mittal believes that together, the companies in the consortium, are stronger and are benefitting from the capacities and abilities of these.