Japan’s SoftBank drops 10 per cent after OneWeb files for bankruptcy protection

TOKYO, Mar 30, 2020, BT. SoftBank Group fell as much as 10 per cent after a satellite operator it invested in filed for bankruptcy, ceding some gains from an unprecedented plan to sell assets and buy back shares, The Business Times reported.

OneWeb made the filing late Friday US time after raising about US$3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus and Qualcomm since its inception. At least US$1 billion of that came from SoftBank, which said it first invested in December 2016 and declined to give a total amount.

It is the latest blow to SoftBank founder Masayoshi Son, who last week unveiled a plan to raise US$41 billion to buy back shares and slash debt. The announcement sent the shares soaring more than 50 per cent in just a few days. The rally was interrupted when Moody’s cut its debt rating by two notches, saying the Japanese investment firm’s plan to sell off assets during a market downturn threatened its total value. SoftBank’s shares traded 6.7 per cent lower on Monday morning in Tokyo.

Mr Son had often pointed to OneWeb as one of the cornerstones of an investment portfolio that ranges from ride sharing, co-working and robotics to agriculture, cancer detection and autonomous driving. The startup was working on providing affordable high-speed access anywhere in the world and targeting 1 billion subscribers by 2025. Mr Son has painted a picture of a future where satellite networks cover every inch of the Earth and a trillion devices connected to the internet disgorge data into the cloud where it is analysed by artificial intelligence.

OneWeb listed liabilities and assets of more than US$1 billion each in its Chapter 11 petition in US Bankruptcy Court in White Plains, New York. The company had been in advanced discussions earlier in the year for a fresh investment, it said in a statement. But the discussions fell apart after the coronavirus pandemic sent markets into a tailspin, it said.