As anticipated, the proposed merger between Intelsat and Jersey-based satellite constellation OneWeb has been pulled.
Intelsat, in a statement issued early on June 1st, said that not enough of its bond-holders had agreed the terms of the SoftBank-enabled financial restructuring to make the scheme work. Intelsat needed an 85 per cent acceptance level of the new terms on offer, and by the midnight May 31st deadline acceptance levels were short of this amount.
Intelsat’s president/CEO Stephen Spengler, said he was disappointed by the result. “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.”
However, as expected, he outlined that a relationship would continue with OneWeb. “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. 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 commercialization of our Intelsat Epic high throughput satellite services.”
What will now interest the market is whether Japan’s SoftBank introduces another satellite operator – perhaps without the massive debt burden being carried by Intelsat, to replace Intelsat and merge with OneWeb.
This morning, we announced the expected termination of Intelsat’s proposed merger with OneWeb. This decision resulted from Intelsat not receiving the requisite percentage of bondholder acceptance of the terms of our debt exchange offers. Please view the news release for more details.
While this is disappointing from a corporate development standpoint, practically speaking, our strategy remains the same. We will continue our close relationship with OneWeb, particularly as it pertains to mobility, energy, government and connected car applications. We will still be developing our integrated GEO/LEO service offerings, and continuing our collaboration on the technologies that will expand the role of our satellite-based solutions in the overall telecommunications landscape.
Our award-winning Intelsat EpicNG program is continuing to deploy, with the Intelsat 35e scheduled for a SpaceX launch in early July. Moreover, our investments and development of new antenna technologies and other partnerships across the ecosystem are progressing. The first of the Kymeta 70 cm antennas has entered commercial production. In each case, we are focused on the innovations that enable us to bring advanced solutions to our customers, partnering with you to accelerate the development of new services that will unlock the growth of new applications.
Our relationship with you remains unchanged. We are energized by your creativity and drive, and look forward to our future collaborations. Thank you for your support and please contact me or your customer relationship manager with any questions.
Intelsat General Corporation