OneWeb
OneWeb plans to create a constellation of low-Earth orbit satellites. Credit: Roscosmos.

UK ministers have launched an inquiry into the government’s $500m (£400m) investment into bankrupt satellite firm OneWeb.

The move follows after concerns were raised by Sam Beckett, the acting permanent secretary and accounting officer of the UK’s Department for Business, Energy and Industrial Strategy (BEIS).

She cautioned that the purchase was ‘unusual’ for the government.

In the letter to the BEIS Secretary of State requesting the ministerial direction, Beckett said: “While in one scenario we could get a 20% return, the central case is marginal and there are significant downside risks, including that venture capital investments of this sort can fail, with the consequence that all the value of the equity can be lost.

“Having reflected carefully on the information provided, I have concluded that whilst there may be a commercial case for investing alongside other commercial investors if you accept advisers’ assessment of One Web’s business plan projections, as a standalone high-risk investment with a possibility that the entirety of the investment is lost and no wider benefits accrued, I cannot satisfy myself that this investment meets the requirements of Value for Money as set out in Managing Public Money.”

Despite the concerns, Business Secretary Alok Sharma overruled Beckett’s speculations and the government went ahead with the bid.

Earlier this month, a consortium consisting of the UK Government and Indian mobile operator Bharti Global was selected to acquire the firm.

OneWeb said the consortium has committed to providing more than $1bn to acquire it and fund the complete restart of its business operations.

Under the deal, the UK agreed to take a 20% equity stake in OneWeb while the business management and commercial operations will be handled by Bharti.

The company entered bankruptcy in March as it failed to secure sufficient capital.

Based in the UK, OneWeb launched 34 more satellites from Baikonur Cosmodrome, Kazakhstan, onboard the Soyuz launch vehicle in March this year.