Intelsat and OneWeb call off planned merger

Artist's impression of an Intelsat EpicNG satellite.
Artist’s impression of an Intelsat EpicNG satellite.

Intelsat and OneWeb officially called off their planned merger earlier this week after the final deadline for a debt swap passed with insufficient support.

As of the expiration date, the minimum tender conditions for the Exchange Offers and Consent Solicitations had not been satisfied.

An official notice said: “The Issuers have not accepted any of the Existing Notes for exchange, any Existing Notes tendered for exchange will be promptly returned to holders, and the Exchange Offers and Consent Solicitations have accordingly been terminated.”

Intelsat said: “The successful completion of the Exchange Offers would have satisfied a condition to completion of the transactions under the Combination Agreement and the Share Purchase Agreement. Intelsat has notified OneWeb and SoftBank of the failure to consummate the Exchange Offers.”

As a result of the termination of the Exchange Offers, Intelsat expects that OneWeb and SoftBank will exercise their respective termination rights under the Combination Agreement and related Share Purchase Agreement on June 2.

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 utilizing 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.”

Intelsat said that as it creates integrated services for these applications, it expects to “accelerate and enhance its goal of unlocking new and larger opportunities in the communications landscape”.

It said: “We remain focused on achieving our operating priorities for 2017, including the continued commercialization of our Intelsat EpicNG high-throughput satellite services.”

OneWeb is building a constellation of more than 600 low earth orbiting (LEO) satellites that, when launched, will be the largest telecommunications constellation, providing approximately 10 terabits per second of low-latency, high-speed broadband to people around the globe.

The communication satellites will operate in the Ku band, with 20 satellites operating in each of 20 different orbital planes to provide consistent coverage.

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