Less than a week ago, satellite internet broadband company OneWeb launched its second big batch of satellites into Earth orbit, growing its active constellation to 74, but it may be all for naught.
As the Financial Times reports today, OneWeb has failed to convince its financial backer SoftBank (SFTB.Y -1.26%) to ante up the $2 billion in additional funding needed to keep the company afloat. Talks have been ongoing between the two companies throughout the coronavirus crisis. OneWeb hopes to convince its backer to give it just enough money to tide it over while seeking new investors. These talks, however, reportedly "collapsed" on Saturday.
As a result, OneWeb "is preparing for bankruptcy and to lay off most of its staff."
Most of its 500 employees will be put at risk if OneWeb proceeds with its plans to file for Chapter 11 bankruptcy in the U.S. today, reports FT, citing "people familiar with the situation."
Also at risk: The $3.4 billion that OneWeb has already attracted from investors including Airbus, rocket company Virgin Group, Qualcomm, and others, in addition to SoftBank.
OneWeb originally planned to orbit some 640 satellites, the number it believed would be needed to provide blanket coverage of the Earth for broadband internet service. The 74 satellites that OneWeb has managed to orbit already, therefore, while a good start, would probably not be enough to get the job done -- putting these companies' entire investment at risk if OneWeb can't emerge from Chapter 11 in a condition that allows it to get the rest of the job done.