Softbank satellite ambitions hit by collapse of Intelsat merger

The proposed merger of Intelsat with Softbank-backed OneWeb has fallen through following an inability to come to an agreement with Intelsat bondholders.

When the deal was announced earlier this year it was contingent on a renegotiation of much of Intelsat’s $15 billion in debt, with a bond-holder haircut of around $2 billion apparently hoped for. It looks like said bond-holders weren’t too keen on the deal and an agreement had yet to be reached by yesterday’s deadline so they called the whole thing off.

“There were many stakeholders’ interests that needed to be satisfied in this complex transaction,” said Intelsat CEO Stephen Spengler. “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.

“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.”

Neither OneWeb nor SoftBank seem to have made any public statements on the collapse of the deal, but according to a Bloomberg report SoftBank has already moved on and is looking for other potential partners for its ubiquitous connectivity grand plan. The report also noted that some of Intelsat’s bonds fell significantly in value on the news.