UK taxpayer faces £200m loss from bailout of Oneweb
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The UK taxpayer faces a £200m paper loss from the government’s decision to bailout satellite-internet company Oneweb.
Imperilled Oneweb was saved by the government in 2020 after filing for bankruptcy.
In a surprise rescue deal, partly driven by Boris Johnson’s key adviser Dominic Cummings, the government pumped around £400m into the company and took a 33 per cent stake in the firm.
The government believed the investment would give the UK a platform in the highly contested region of low earth orbit, while alleviating fears of a Chinese takeover.
But the value of the UK government’s stake has more than halved since it merged with Paris-listed space firm Eutelstat.
The French company’s share price has fallen by nearly a quarter since the all-share deal was completed in September, leaving taxpayers with a stake in the combined business now worth £195m, The Telegraph reported.
The stock hit record lows of €3.70 earlier this month, down from €10 before the deal was revealed last year. The British government now holds a near 11 per cent stake in the merged group, with positions on the board alongside the French state.
The merger aimed to create a new powerhouse in the fiercely competitive satellite internet market, rubbing up against the likes of Elon Musk-owned SpaceX’s Starlink and Amazon’s Project Kuiper.
However, analysts have flagged concerns over the amount of cash needed by Oneweb for it to complete its business plan. The company is after as much as $4bn to build new satellites and has burned through billions in venture capital in the past.
A government spokesperson said: “Share prices fluctuate in the short term but this was a long-term investment. The Government’s investment in OneWeb has already created around 400 UK jobs, and our stake in the merged entity will help bring jobs and improved connectivity for years to come.”
Eutelstat OneWeb were approached for comment.