Taxpayers are more than £200m out of their pockets after bailing out a controversial satellite company
A senior government official has admitted that taxpayers have spent more than £200 million out of pocket following the controversial bailout and subsequent sale of a UK-based satellite company.
Charles Donald, chief executive of UK Government Investments (UKGI), has confirmed to MPs that the value of the stake it bought in OneWeb for just over £400m in 2020 has fallen to around £160m.
French company Eutelsat acquired OneWeb last year in a deal in which the government handed over an 11 percent stake in the enlarged company.
But this has since declined in value.
“At the current market value of Eutelsat, we are not worth the original purchase,” Donald admitted to the Treasury Select Committee.
Losses: France’s Eutelsat acquired OneWeb last year in a deal that saw the government hand over an 11% stake in the enlarged company.
OneWeb is a pioneering low-Earth orbit satellite company that competes with Elon Musk’s Starlink, and aims to provide high-speed Internet access where traditional terrestrial infrastructure is difficult to access.
The government’s original rescue of OneWeb from bankruptcy in 2020 – said to have been championed by Dominic Cummings, an adviser to Boris Johnson – did not receive the stamp of approval from UKGI officials.
Donald told MPs that after analyzing the deal “we were not in a position to confirm that it would be a value for money deal at that time”.
But the officials were overruled by the then Business Minister Alok Sharma.
OneWeb’s subsequent sale to Eutelsat, tentatively agreed in 2022, was hailed as vindication of the rescue.
The government described the sale as “positive news for UK taxpayers”.
At the time it represented a paper profit for the government, with its share estimated at around £500 million.
But the decline in Eutelsat’s share price led to a sharp decline in the valuation.
The situation worsened in recent days — sending shares down 17 percent so far this year — after a trading update last week warned that OneWeb’s satellite software was running behind schedule.
(tags for translation) Daily Mail