A number one authorities official has admitted that taxpayers are greater than £200million out of pocket after the controversial bail-out and subsequent sale of a UK-based satellite tv for pc agency.
Charles Donald, chief govt of UK Government Investments (UKGI), confirmed to MPs that the worth of the stake it purchased in OneWeb for simply over £400million in 2020 has fallen to round £160million.
France’s Eutelsat took over OneWeb final yr in a transaction which noticed the federal government handed an 11 per cent stake within the enlarged firm.
But this has since slumped in worth.
Donald admitted to the Treasury choose committee: ‘At the current market capitalisation of Eutelsat we’re not equating to the worth of the unique buy.’
Losses: France’s Eutelsat took over OneWeb final yr in a transaction which noticed the federal government handed an 11% stake within the enlarged firm
OneWeb is a pioneer of ‘low earth orbit’ satellites that competes with Elon Musk’s Starlink, aiming to offer entry to high-speed web the place conventional floor infrastructure is difficult to succeed in.
The Government’s unique bail-out of OneWeb from chapter in 2020 – mentioned to have been championed by Boris Johnson’s adviser Dominic Cummings – was not given the seal of approval by UKGI officers.
Donald instructed 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 officers have been 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 revenue for the Government, with its stake valued at about £500million.
But a Eutelsat share worth slide has sharply lowered the valuation.
It was worsened in latest days – leaving the shares 17 per cent down to this point this yr – after a buying and selling replace final week warning that OneWeb’s satellite tv for pc programme was operating not on time.