Intelsat intends to terminate merger deal with OneWeb
Intelsat is expecting to end its proposed share-for-share merger deal with satellite start-up OneWeb, due to lack of support from its creditors.
In February, Intelsat had agreed to merge with OneWeb in a $14bn deal that needed debt investors to accept less than full face value on their holdings, reported Reuters.
OneWeb was supported by Japan-based SoftBank Group.
Intelsat has also dismissed several debt swap offers mentioned in the merger deal, as its creditors did not agree to the terms by the deadline of 31 May.
The company was planning to end its merger with OneWeb by 2 June.
Intelsat CEO Stephen Spengler said: “There were many stakeholders’ interests that needed to be satisfied in this complex transaction. We are disappointed that our bondholders were unwilling to accept the terms of the exchange offers presented over the course of this process.
“Even without a merger of our companies, the pre-existing commercial agreement among Intelsat, OneWeb and SoftBank will continue. Under this agreement, we plan to jointly develop integrated solutions utilising both of our fleets and to act as a sub-distributor to SoftBank for the attractive application segments of mobility, energy, government, and connected car.
“As we create integrated services for these applications, we expect to accelerate and enhance our goal of unlocking new and larger opportunities in the communications landscape. We remain focused on achieving our operating priorities for 2017, including the continued commercialisation of our Intelsat Epic high-throughput satellite services.”
The termination of the deal is expected to impact SoftBank, which was exploring the idea of offering improved internet access worldwide through the combination of OneWeb and Intelsat.