A leading government official has admitted that taxpayers are more than £200million out of pocket after the controversial bail-out and subsequent sale of a UK-based satellite firm.
Charles Donald, chief executive of UK Government Investments (UKGI), confirmed to MPs that the value of the stake it bought in OneWeb for just over £400million in 2020 has fallen to around £160million.
France’s Eutelsat took over OneWeb last year in a transaction which saw the government handed an 11 per cent stake in the enlarged company.
But this has since slumped in value.
Donald admitted to the Treasury select committee: ‘At the current market capitalisation of Eutelsat we’re not equating to the value of the original purchase.’
Losses: France’s Eutelsat took over OneWeb last year in a transaction which saw the government handed an 11% stake in the enlarged company
OneWeb is a pioneer of ‘low earth orbit’ satellites that competes with Elon Musk’s Starlink, aiming to provide access to high-speed internet where traditional ground infrastructure is hard to reach.
The Government’s original bail-out of OneWeb from bankruptcy in 2020 – said to have been championed by Boris Johnson’s adviser Dominic Cummings – was not given the seal of approval by UKGI officials.
Donald told MPs that after analysing the deal ‘we were not in a position to confirm that it would be a value for money transaction at that point in time’.
But officials were overruled by then-business secretary Alok Sharma.
OneWeb’s subsequent sale to Eutelsat, initially agreed in 2022, was hailed as a vindication of the bail-out.
The Government described the sale as ‘positive news for UK taxpayers’.
At the time it represented a paper profit for the Government, with its stake valued at about £500million.
But a Eutelsat share price slide has sharply reduced the valuation.
It was worsened in recent days – leaving the shares 17 per cent down so far this year – after a trading update last week warning that OneWeb’s satellite programme was running behind schedule.
