India telecom tycoon bids for SoftBank-backed OneWeb: sources

Bengaluru

INDIAN telecommunications tycoon Sunil Mittal has submitted a bid for OneWeb, the bankrupt satellite firm whose investors include SoftBank Group Corp, people with knowledge of the matter said.

An arm of Mittal's Bharti Enterprises conglomerate made an offer for London-based OneWeb with backing from the UK government, according to the people, who asked not to be identified because the information is private. The OneWeb sale has also attracted initial interest from Canada's Telesat, the people said.

The UK government plans to commit around US$500 million to OneWeb alongside other investors as part of the company's Chapter 11 bankruptcy proceedings, a person with knowledge of the matter said last week. OneWeb has said that bids were due on Friday.

Part of the UK's interest in supporting OneWeb is to form the basis for a new national navigation system, after the European Union froze Britain out of the most secure elements of the bloc's project, called Galileo.

Prime Minister Boris Johnson is trying to attract fresh foreign investment from countries including India, China and the US to help offset the UK's departure from the European Union.

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OneWeb makes so-called low-Earth orbit satellites that provide high-speed communications. It faces competition from Elon Musk's SpaceX Starlink project and Jeff Bezos's Amazon-linked Project Kuiper, as well as from incumbents such as Inmarsat, Intelsat SA and Eutelsat Communications SA.

The company has raised about US$3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus SE and Qualcomm Inc. since its inception, according to filings.

In a March 27 bankruptcy announcement, OneWeb cited the financial effects and market turbulence related to Covid-19 pandemic for its failure to obtain financing it needed.

Mr Mittal's group controls Bharti Airtel Ltd, India's second-biggest wireless operator. The carrier is the biggest shareholder of publicly-traded tower owner Bharti Infratel Ltd.

Shares of Bharti Airtel gained as much as 1.7 per cent in early trading on Tuesday and were up 0.3 per cent at 1.11pm in Mumbai, giving the company a market value of about US$41 billion. Bharti Infratel shares rose 1.8 per cent.

No final decisions have been made, and other suitors could still emerge for OneWeb, the people said. A representative for Bharti couldn't immediately comment, while spokespeople for Telesat and OneWeb declined to comment.

A representative for the UK's Department for Business, Energy & Industrial Strategy declined to comment on any bid.

"We have made clear our ambitions for space and are developing a new National Space Strategy to bring long-term strategic and commercial benefits to the UK," the government spokesperson said in an e-mailed statement. "We are in regular discussions with the space industry as part of this work."

Bharti Enterprises participated in a 2015 funding round for OneWeb alongside other investors including Qualcomm Inc, Richard Branson's Virgin Group and Airbus.

OneWeb formed an alliance in 2018 with partners including Delta Air Lines Inc, Bharti Airtel and Sprint Corp to allow wireless carriers to extend their service into airplane cabins. BLOOMBERG