Amazon is among the players in a bankruptcy bidding game with the assets of the OneWeb satellite venture at stake, according to Space Intel Report.
Quoting unnamed industry officials, Space Intel Report’s Peter B. de Selding says other potential bidders include two Chinese organizations that are apparently acting on behalf of the Chinese government; the Paris-based satellite operator Eutelsat, which apparently has the backing of the French government and several other European Union member states; and Cerberus Capital Management, a New York-based private equity firm with interesting connections.
Space Intel Report also quotes the officials as saying that SpaceX was among those expressing interest, but SpaceX CEO Elon Musk denied that was the case. “Not SpaceX,” Musk wrote in a tweet.
SpaceX has already launched 420 satellites for its Starlink broadband constellation and says it’s planning to begin limited commercial service later this year — a state of affairs that makes Starlink the front runner in the satellite internet race.
OneWeb has had 74 satellites launched into orbit in preparation for offering high-speed internet service from above, starting in the Arctic and eventually going global. But in March, the company filed for bankruptcy when a major backer, Japan’s SoftBank Group, declined to kick in additional funding amid the financial chaos created by the coronavirus pandemic.
The bankruptcy process includes a timetable for auctioning off OneWeb’s assets to compensate its creditors — led by Europe’s Arianespace consortium, which has an unsecured claim of $238 million. Monday was the deadline for potential buyers to put in non-binding bid proposals, which would give them a chance to look at OneWeb’s books.
Amazon is notable because it has its own plans for a satellite broadband service. Amazon envisions 3,236 satellites in low Earth orbit for what’s known as Project Kuiper, but it doesn’t yet have the required regulatory clearances and hasn’t yet announced a timetable for satellite deployment or service.
Amazon could conceivably make use of OneWeb’s existing spectrum access for Project Kuiper’s purposes. It’s also conceivable that Amazon isn’t interested in submitting a binding bid, but just wants to get a better sense of how the constellation competition is shaping up. We asked Amazon’s PR team about de Selding’s report, and were told that “we don’t comment on speculation.”
European and Chinese bidders would arguably have a geopolitical as well as a commercial interest in building upon OneWeb’s constellation.
“If OneWeb can persuade one or more governments that they must seize the OneWeb opportunity or ‘leave low Earth orbit to the Americans,’ or to the Chinese, or the French, whoever — then the auction could be a lively affair,” de Selding writes.
Assuming de Selding’s sources are correct, Cerberus Capital would be the wild card in this constellation poker game: GeekWire reported last year that Cerberus acquired Stratolaunch, the Seattle-based aerospace venture that was created by Microsoft co-founder Paul Allen. Stratolaunch’s new owners say they’re continuing to develop hypersonic vehicles that could be used for national security purposes.
The co-founder and CEO of Cerberus is Steve Feinberg, a secretive billionaire with ties to President Donald Trump. Cerberus focuses on investing in distressed companies, and the prospect of having OneWeb’s assets fall into Chinese hands could conceivably serve as an added incentive for Cerberus to make a bid.
It won’t be too long before all the players have to put their cards on the table: De Selding reports that final, binding bids (and good-faith deposits) are due on June 26, with the auction scheduled for July 2 at the New York offices of Milbank LLP, OneWeb’s legal counsel.
Update for 9:30 a.m. PT May 7: We’ve updated this report with Elon Musk’s denial of the claim that SpaceX is interested in OneWeb’s assets, as well as the fact that Amazon declined to comment.