OneWeb is a global communications network powered by a constellation of 650 Low Earth Orbit (LEO) satellites. Headquartered in London, OneWeb is enabling high-speed, low latency connectivity for governments, businesses, and communities everywhere around the world. OneWeb is building what it expects to be the world’s first satellite system capable of bringing terrestrial quality broadband services to small terminals anywhere on Earth. Founded in 2012, OneWeb aims to provide reliable, low-latency broadband connectivity to hundreds of millions of end-users and enterprises around the world. To accomplish this goal, OneWeb is building an initial constellation of 882 LEO satellites that will operate in 18 polar orbiting planes of 49 satellites each. Commencement of service was expected as early as late 2019, with full global coverage expected by 2022.

OneWeb successfully demonstrated its turnkey satellite-based communications system to the U.S. Department of Defense (DoD) on 02 March 2021. The event, which was conducted in front of service representatives from the US Space Command at OneWeb’s demonstration facility in Melbourne, Florida, represented the first time the solution has been demonstrated to the U.S. Government. Designed to provide Governments with truly global and resilient connectivity services from November 2021 onwards, OneWeb’s solution would feature a network of 648 Low Earth Orbit (LEO) satellites, global gateways and air, maritime and land user terminals. During the live event, OneWeb demonstrated, under test conditions, how an initial constellation of 110 Low Earth Orbit (LEO) satellites and two ground user terminals provided data rates up to 500Mbps at latency levels as low as 32ms. The demonstration also illustrated the seamless handover of connectivity between multiple LEO satellites as they passed overhead.

On 26 March 2021 OneWeb announced a Memorandum of Understanding with US DoD satellite communications application specialist, TrustComm Inc. The agreement, signed on 16 March, envisioned OneWeb and TrustComm working together to deliver OneWeb’s high speed, low latency, beyond line-of-sight communications services – with initial focus on the northern latitudes. OneWeb’s partnership with TrustComm will focus on early adopters looking to take advantage of LEO technology including the US Naval Research Lab, US Army Futures Research Lab and others. Solutions will be deployed initially into areas of operation including the Arctic which continues to suffer from poor levels in connectivity due to its high latitude and extreme terrain. OneWeb’s Head of Government Services, Dylan Browne said: “The US DoD is OneWeb’s largest single customer and so we will ensure we have the tools and vehicles in place to contract for service this November when our network goes live above the 50th parallel."

In December 2016, SoftBank announced its commitment to invest $1 billion in OneWeb to support the technological development and the construction of the world’s first and only high volume satellite production facility to further accelerate OneWeb’s vision of delivering affordable, high-speed, low latency internet to rural and remote communities around the world. Intelsat was a founding investor in OneWeb, making a minority equity investment in 2015.

On 28 February 2017 Intelsat (NYSE: I) and OneWeb announced that they had entered into a definitive combination agreement pursuant to which Intelsat and OneWeb would merge in a share-for-share transaction. Intelsat and SoftBank Group Corp. (“SoftBank”) also entered into a definitive share purchase agreement pursuant to which SoftBank would invest $1.7 billion in newly issued common and preferred shares of the combined company. Both the merger and the SoftBank investment are subject to, among other conditions, successful completion of debt exchange offers to certain existing Intelsat bondholders as well as receipt of certain regulatory approvals.

On 01 June 2017 Intelsat S.A. announced that the previously announced agreement between Intelsat and WorldVu Satellites Limited (“OneWeb”) for the minimum tender conditions for the Exchange Offers and Consent Solicitations had not been satisfied. 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." Intelsat announced on May 13, 2020 its decision to undertake a financial restructuring process to position the Company for long-term success and allow for the business to emerge with a strengthened balance sheet to complement its strong operating model already in place.

OneWeb managed to launch 74 of its planned 648 satellites before going bankrupt in March 2020 – an early victim of the coronavirus crisis. On March 27, 2020, WorldVu Satellites Limited, Debtor-in-Possession (OneWeb DIP) and certain of its affiliates filed petitions for relief under Chapter 11 of Title 11 of the United States Code. Following a competitive sale process supervised by the United States Bankruptcy Court for the Southern District of New York, BidCo emerged as the successful bidder to acquire all of the equity interests in OneWeb DIP’s immediate parent company, OneWeb Communications Limited. Upon completion of the transaction, and in exchange for approximately $1 billion of equity commitments to BidCo, Bharti Global Limited (Bharti) and the United Kingdom’s Secretary of State for Business, Energy and Industrial Strategy, representing Her Majesty’s Government (UK Government) would each directly and individually hold approximately 42.2 percent of the voting equity of BidCo, and therefore indirectly and collectively hold approximately 85 percent of the voting equity of OneWeb Communications Limited and its wholly owned subsidiary, the reorganized OneWeb.

The U.K. government's decision to invest in bankrupt satellite operator OneWeb was as much about competing globally with other space powers as it is boosting broadband coverage, Business Secretary Alok Sharma said 09 July 2020. During a parliamentary committee hearing, Sharma said the plan was not only to use the constellation to amp up broadband provision in the UK, and to offer services for aviation and shipping, but also about geopolitical positioning. "The U.K. has an ambition to be a world leader in the space sector," Sharma told the committee. "I think this [investment] presents ... strategic geopolitical opportunities for the U.K. as well."

The UK Space Agency (UKSA) procured a separate independent technical assessment. It highlights the substantial technical and operational hurdles that OneWeb would need to overcome in order to become a viable and profitable business. Taking that into account, UKSA consider that there is a high likelihood of further investment being required to complete the constellation and encourage user uptake of the services, increasing the risk that further HMG investment would be required in order to realise the potential benefits. As a result, UKSA’s judgement is that the independent technical assessment further illustrates the considerable uncertainties in the modelling done for HM Treasury.

Despite the compressed timetable, the UK National Security Strategic Investment Fund (NSSIF) on government’s behalf sought professional financial advice on the company’s prospects. That work involved scrutinising the business plan from the firm’s management, including its revenue projections, through a financial model. It drew on expertise provided by a space-sector consultant. The model was also adjusted to ensure that it reflects a more conservative projection of the likely returns. That case concluded a positive return might be achieved. The fact that any investment would also be alongside other private commercial investors as part of a wider consortium, with one large and trusted investor already on board, indicates that there is a rational commercial case for investing. However, it should be noted that the lead co-investor is a telecoms company who will also be considering synergies with the wider businesses, in addition to the pure commercials of the case, which are not relevant to a government decision on this investment. Moreover, there remain a very broad range of uncertainties and possible outcomes around this case, so it is hard at this time to be confident in the underlying assumptions or the likely returns.

The Prime Minister’s and the Chancellor’s interest was in wider benefits such as the potential long-term geo-political advantages for foreign policy and soft power that would come with sovereign ownership of a fleet of satellites. Moreover, they did not underestimate the potential opportunity that this investment represents for UK interests globally. It would be the first megaconstellation operator, if it succeeds, and would have the potential to connect millions of people, in particular those in remote, rural locations without broadband access. There are also broader potential benefits that could be realised beyond global broadband. If OneWeb is successful, the UK would have a share in a global space platform, including through possible future research and development, and potentially bringing future manufacturing to the UK. There could be wider, less quantifiable benefits of signalling UK ambition and influence on the global stage.

The combination of Intelsat and OneWeb will enable the combined company to have the first hybrid geostationary (“GEO”) and LEO satellite fleet, harnessing the strengths of each to offer improved services to existing and potential customers, and become a global leader in broadband network services. The combined company’s GEO satellites will provide wide beam coverage, well-suited for broadcast applications, including video distribution and wide-area data connectivity, and high throughput spot beam services, while the combined company’s LEO constellation is expected to provide true pole-to-pole broadband coverage with high speed and significantly lower latency than geostationary commercial satellite services. As the cornerstone of this hybrid product offering, the combined company will aim to offer its services over a family of small, low-cost user terminals to customers, which are capable of communicating seamlessly with both LEO and GEO satellites.

OneWeb was founded in 2012 and commenced its current business operations in 2014. Accordingly, it has a limited operating history upon which to evaluate the viability and sustainability of its business and its acceptance by consumers. Currently, OneWeb has limited operations, limited financial resources, and no revenues. These circumstances make it difficult to evaluate its business and prospects. In addition, OneWeb’s business plans and prospects must be considered in light of the problems, expenses, difficulties, delays, complications and uncertainties frequently encountered by and associated with a company in the early stages of its business growth, which are exacerbated by the unique nature of the OneWeb business and the regulatory environment in which it operates.

Implementation of OneWeb’s business strategy requires a substantial outlay of capital and there can be no assurance that it will be able to satisfy its capital requirements. OneWeb is currently pursuing the OneWeb Satellite Financing to fund the construction and deployment of its first satellite constellation. The availability and cost to OneWeb of external financing, including any such secured financing, depend on a number of factors outside of OneWeb’s control, including general market conditions, OneWeb’s financial performance and the perceived value of OneWeb’s assets and expected future revenue stream, as well as OneWeb’s credit rating. Following the Combination, Intelsat’s ability to fund the OneWeb business through earnings from and/or financings of Intelsat’s existing business will be limited, if not effectively prohibited entirely, by the terms of Intelsat’s existing and future indebtedness. OneWeb’s inability to obtain the secured financing it is seeking or to otherwise meet its capital needs could have a material adverse effect on OneWeb’s ability to generate revenue and execute on its business plan. In addition, the terms of any such financing may be more restrictive than currently anticipated and may also cost more than currently expected, which could adversely affect OneWeb’s business and prospects.

OneWeb’s LEO constellation will operate closer to the earth than traditional geostationary communications satellites, which is expected to reduce latency and provide end-users a more responsive connectivity experience. OneWeb’s user experience is expected to be similar to fixed broadband (i.e., without a noticeable delay), which will enable the use of applications and products not traditionally suited for satellite connectivity. OneWeb believes that these qualities will make its system well suited for two-way data communications that require nearly real time, high-speed access anywhere on Earth. The OneWeb service is targeted to appeal to consumer and enterprise broadband markets, cellular backhaul for both macro and small cells, and specialized mobility applications, including aeronautical and maritime applications.

OneWeb partnered with Airbus Defence and Space to form a joint venture, OneWeb Satellites, for the manufacture of its LEO constellation. OneWeb Satellites intends to utilize a modular design and a mass production assembly line approach to minimize per-satellite manufacturing costs. The OneWeb Satellite supply chain is substantially advanced with nearly 90% of the component supply chain under contract. For the network elements of the OneWeb System, OneWeb has contracted with industry leaders, such as Qualcomm and Hughes. The OneWeb System is expected to be an Internet Protocol (“IP”) network based on the 3rd Generation Partnership Project Long-Term Evolution (commonly referred to as “4G”) standards and to function as a transparent internet link between customer networks and end-user equipment anywhere in the world, enabling end-users to connect to the internet using their mobile phones, laptops/PCs and tablets.

OneWeb Satellites, a joint venture equally owned by OneWeb and Airbus Defence and Space, unveiled its decision to build a state-of-the-art manufacturing facility in Exploration Park. OneWeb will deploy an innovative constellation of 900 satellites into medium Earth orbit; this extensive constellation will allow OneWeb to offer high speed internet access anywhere in the world. OneWeb has teamed with recognized commercial brands including Coca-Cola, Virgin Group and Qualcomm in its quest to bring internet access to underserved populations around the world.

Leading a transformational shift in the way that spacecraft are integrated, OneWeb Satellites factory will be the most advanced and highest volume satellite production facility in the world, capable of producing 15 satellites per week at full capacity. Moreover, it will be the only satellite production facility co-located within a spaceport, eliminating the costly time-consuming step of shipping sensitive satellite systems thousands of miles.

Airbus OneWeb Satellites LLC (“OWS”), a U.S.-based joint venture equally owned by OneWeb and Airbus Defence and Space SAS (“Airbus”), is expected to be the exclusive supplier of satellites to OneWeb for its initial and second-generation satellite constellations. Pursuant to a Contract Terms and Conditions for Design and Development of the Generation I constellation (the “Design and Development Contract”), OWS has agreed to provide to OneWeb all necessary personnel, material, services and facilities and related ancillary services to develop, manufacture, test and deliver an agreed number of flatsats (i.e., satellite test beds), software test benches, qualification models and Pilot Satellites, at cost-plus pricing.

After the pilot program passes its critical design review, OneWeb and OWS will enter into a Purchase Contract (the “Generation I Purchase Contract”) pursuant to which OWS will manufacture and deliver to OneWeb the approximately 900 satellites that will comprise OneWeb’s initial constellation, along with a number of satellite simulators, certain support services, and, if associated options are exercised, up to an additional 325 functionally identical satellites. The final price per satellite under the Generation I Purchase Contract is expected to be fixed following the satellite critical design review, pursuant to the Design and Development Contract.

Arianespace S.A. (“Arianespace”) will be OneWeb’s principal launch provider. Pursuant to a Launch Services Agreement (the “Arianespace LSA”), Arianespace will provide 21 launch services for the launch of satellites. Arianespace’s Soyuz 2b three-stage launcher is expected to be the main launch vehicle to be utilized by OneWeb to deploy its satellites. All launches are scheduled to be completed by December 31, 2019. The Arianespace LSA includes options, available for exercise until December 31, 2020, for up to five additional launches using the Soyuz launch vehicle and three additional launches using the Ariane 6 launch vehicle.

OneWeb and Arianespace have also entered into a Dispenser Supply Agreement (the “Dispenser Supply Agreement”), for the supply by Arianespace to OneWeb of 21 dispensers and associated services for the launch services to be provided by Arianespace pursuant to the Arianespace LSA, to be paid incrementally upon the achievement of certain milestones under the contract. The Dispenser Supply Agreement includes options for the purchase of up to five additional dispensers and associated services.

WorldVu Satellites Limited (“OneWeb”) is a U.S. market access grantee for a U.K.- authorized, non-geostationary fixed-satellite system (the “OneWeb FSS System”) that will operate in low-earth orbit (“LEO”) utilizing the Ku- and Ka-bands. OneWeb will launch its first satellites in Q1 2019 and is deploying the necessary ground infrastructure to support the launch and operation of its LEO constellation. OneWeb recently filed applications with the International Bureau to license Ka-band gateway earth station facilities in: Talkeetna, Alaska; Southbury, Connecticut; and Clewiston, Florida.

OneWeb is executing a multi-stage test program of the OneWeb System. OneWeb is currently testing fully functional satellite components and engineering models to ensure functional compliance. Later this year, OneWeb expects to produce two satellites that will undergo an extensive test program to fully qualify the satellite design. In parallel, the ground equipment and network for the OneWeb System are being designed, built and tested to verify compliance with system requirements. In 2018, pilot ground sites (gateways) are expected to be installed and “Pilot Satellites” are expected to be launched into orbit to test end-to-end compliance, operations and performance of the satellite and related ground infrastructure. The Pilot Satellites are expected to be fully functional and once validated in orbit are expected to become part of the larger fleet.

The Pilot Satellites built and tested at the OneWeb Satellites facility in Toulouse, France, and procurement of specialized tooling for the factory line at this facility has been initiated and is expected to be ready for satellite assembly in the summer of 2017. Additionally, OneWeb Satellites broke ground in March 2017 on a facility in Exploration Park, Florida. The Toulouse facility will house the first OneWeb Satellites assembly line that will be used for testing and validation of the Pilot Satellites. Following completion of the testing program, it is expected that production of the full constellation will be carried out at the Florida facility.

OneWeb has secured certain priority rights at the International Telecommunication Union (“ITU”) to approximately 7 GHz of globally harmonized spectrum for NGSO constellation. OneWeb believes it is on track to meet regulatory deadlines with the planned launch of its first satellite in 2018. A key regulatory requirement to retaining rights to this spectrum is that the OneWeb System comply with the rules that protect geostationary satellite operations. The OneWeb System is being designed to meet this key regulatory criterion.

For the fiscal years ending December 31, 2015 and 2016, respectively, on a consolidated basis (including OneWeb Satellites, a variable interest entity of which OneWeb is the primary beneficiary) OneWeb had approximately $27 million and $51 million of operating expenses and approximately $101 million and $190 million of cash capital expenditures. OneWeb did not have any material revenues in the last two fiscal years. As of December 31, 2015 and 2016, respectively, on a consolidated basis (including OneWeb Satellites, a variable interest entity of which OneWeb is the primary beneficiary) OneWeb had approximately $459 million and $511 million of total assets, $28 million and $125 million of total liabilities, and $354 million and $112 million of cash and cash equivalents.

Over 90% of the supply chain for the OneWeb Generation I satellite is currently under contract, and in aggregate, OneWeb contemplates total capital expenditures to develop the OneWeb Generation I constellation will be approximately $4 billion.

OneWeb has successfully raised $1.7 billion of equity and committed equity to date, including approximately $645 million to be funded upon consummation of the Combination or, if earlier, upon OneWeb obtaining loans from Export Credit Agencies (“ECAs”), ECA guaranteed lenders, development finance or other multilateral institutions. OneWeb is currently moving through the process of securing the OneWeb Satellite Financing (as defined in this Offering Memorandum under “Summary—Description of the Combination Agreement, the Share Purchase Agreement, the Combination, the SoftBank Investment and the Related Transactions”) from such institutions in an amount of up to approximately $3.0 billion which, combined with the equity already raised, will fund the development of the OneWeb Generation I constellation.

Qualcomm Technologies, Inc. (“Qualcomm”) provides to OneWeb global satellite constellation and associated infrastructure services for the provision of terrestrial Internet access, including user terminal (“UT”) to gateway communications design and development services. In March 2015, OneWeb and Qualcomm agreed that Qualcomm would complete the initial design work, including basic system design, and the initial UT to the gateway system preliminary design review. In June 2015, the parties agreed that Qualcomm would complete the initial system design and development phase for the terrestrial segment of the system.

MacDonald, Dettwiler and Associates Corporation (“MDA”), pursuant to a number of contracts between OneWeb and MDA, (i) provides OneWeb with engineering support for space qualified subsystems that can be manufactured in large quantities, (ii) undertakes certain feasibility studies related to OneWeb’s satellite system and (iii) conducts a kick-off and system requirements review and system design review.

Pursuant to a Master Development Services Agreement (the “Hughes Development Services Contract”), Hughes Network Systems, LLC (“Hughes”) will design a gateway subsystem (software and hardware) and supply and sell an agreed minimum amount of the gateway equipment needed for each gateway location on a firm fixed priced basis (actual cost plus a percentage). Hughes will also provide related support services for the gateways. Finally, Hughes will design a user terminal and manufacture and supply an agreed minimum portion of the total quality of user terminals. As of the date of this Offering Memorandum, OneWeb and Hughes have formalized the segments within which Hughes will develop and provide to OneWeb top-level ground segment architecture for the OneWeb constellation, a satellite access point radio signal processor and other subsystems, and will also provide a second source for the Block Up-Converter-Power Amplifier Equipment.

OneWeb has entered into the SoftBank-OneWeb Capacity Purchase Agreement (as defined in this Offering Memorandum under “—Description of Expected Intercompany Agreements and Arrangements—SoftBank-OneWeb Capacity Purchase Agreement”), whereby SoftBank has agreed to purchase 100% of OneWeb’s capacity from its initial satellite constellation and SoftBank has an option to purchase 100% of OneWeb’s capacity from its second generation satellite constellation. Under the terms of this agreement, OneWeb will receive a percentage of revenue from the sale by SoftBank of OneWeb’s capacity and, subject to OneWeb achieving and maintaining certain service stage standards, meeting customary industry service levels and force majeure events, SoftBank will be required to make minimum payments to OneWeb. See “—Description of Expected Intercompany Agreements and Arrangements—SoftBank-OneWeb Capacity Purchase Agreement.”

OneWeb has granted Indian Continent Investment Limited (together with its affiliates, “Bharti”) a right of first refusal (“ROFR”) to enter into one or more take or pay service contracts with OneWeb for “OneWeb Services” (defined broadly as internet services provided to residences and businesses in India and expressly excluding aero, maritime, identified oil and gas customers and United States government services), on terms at least as favorable to OneWeb as those offered by any third party to OneWeb, for (i) 50% of the capacity of the OneWeb Services in India, and (ii) 100% of the capacity of the OneWeb Services in Bangladesh, Sri Lanka, Burkina Faso, Chad and a number of countries in Africa, in each case in market segments other than the Intelsat Exclusivity Markets.

Additionally, OneWeb has granted Bharti a right of first offer (“ROFO”), such that, if OneWeb does not receive an offer from a third party for OneWeb Services capacity in a country covered by the ROFR prior to the launch of OneWeb’s services in that country, OneWeb would be required to offer to Bharti the opportunity to enter into one or more take or pay service contracts for OneWeb Services for (i) 50% of the capacity of the OneWeb Services in India, and (ii) 100% of the capacity of the OneWeb Services in Bangladesh, Sri Lanka, Burkina Faso, Chad and a number of countries in Africa. The ROFR expires on the earlier to occur of the launch of OneWeb Services in India (under the first agreement) or Bangladesh/African territory (under the second agreement) and such time as Bharti enters into agreements for 50% of OneWeb Services (under the first agreement) or for 100% of OneWeb Services (under the second agreement) in such territories.

SoftBank and OneWeb have entered into a sub-distribution agreement with Grupo Salinas Telecom II, S.A. de C.V. (“Grupo Salinas”) to distribute and re-distribute OneWeb Capacity in Central and South America (including Mexico). Under this sub-distribution agreement, Grupo Salinas has the right to resell OneWeb service packages purchased from SoftBank on a most favored nation (“MFN”) basis – i.e., on terms that are no less favorable than those received by other sub-distributors, including as to pricing and capacity allocations, if any, for resale into Grupo Salinas’ market segments in Mexico and certain countries Central and South America. Sub-distribution rights with respect to the home and small business market segments and sales to government entities within the applicable territories expressly exclude aero mobility services, maritime mobility services, oil and gas customer services to designated customers, and all capacity sales to the United States government.

SoftBank and OneWeb have entered into a sub-distribution agreement with Hughes to distribute and re-distribute OneWeb Capacity in the U.S., Brazil, India and Europe. Under this sub-distribution agreement, Hughes has the right to resell OneWeb service packages (consisting of internet connectivity services to land-based locations in the home and small business market segments and not Intelsat’s maritime, aero, oil & gas and United States Government market segments) purchased from SoftBank on an MFN basis, including as to pricing and capacity allocations, if any, for resale into Hughes’ market segments in the United States, Brazil, India and Europe.

SoftBank and OneWeb have entered into an Amended and Restated Strategic Cooperation Agreement with Intelsat (the “ARSCA”), whereby Intelsat has contracted for a take-or-pay commitment with SoftBank for $100.0 million of OneWeb’s network capacity over five years after the network is operational, and SoftBank has granted Intelsat semi-exclusive distribution rights up to a cap of $100.0 million during the take-or-pay term in the market segments of aero mobility, maritime, mobility, oil and gas (as to certain key customers) and United States government capacity services (collectively, the “Intelsat Exclusivity Markets”). Intelsat’s right to resell OneWeb services purchased in accordance with the take-or-pay commitment is exclusive in the Intelsat Exclusivity Market Segments throughout the world, except that SoftBank retains the right to sell OneWeb services directly to customers in the Intelsat Exclusivity Markets. Moreover, pursuant to the terms of the ARSCA, if SoftBank appoints sub-distributors to sell OneWeb services in the car applications market, including autonomous and semi-autonomous automobile applications, then SoftBank may not appoint any FSS service provider other than Intelsat as a sub-distributor. If Intelsat is granted rights to resell OneWeb services into the same market segments and territories as Hughes or Grupo Salinas, SoftBank may be required to offer Hughes or Grupo Salinas commercial terms (including as to pricing and capacity allocation) at least as favorable as those received by Intelsat as a result of the MFN rights granted by SoftBank to Hughes and Grupo Salinas. The ARSCA will continue to be in effect if the Combination is not consummated. If the Combination is consummated, the ARSCA will no longer be in effect and will be superseded by the Intelsat-SoftBank Capacity Purchase Agreement. See “—Description of Expected Intercompany Agreements and Arrangements—Intelsat-SoftBank Capacity Purchase Agreement.”

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Page last modified: 08-05-2021 10:04:59 ZULU