Eutelsat’s Debt Outlook Shifts as Asset Sale Collapses

Eutelsat FR0010221234

A major transaction intended to bolster the balance sheet of satellite operator Eutelsat has fallen through, forcing the company to revise its debt projections. The failure to sell a portfolio of ground infrastructure assets represents a significant setback for the group's financial restructuring plans.

The company confirmed yesterday that the deal with private equity firm EQT Infrastructure VI will not proceed, as certain conditions required for closing were not met. This collapse eliminates anticipated net proceeds of approximately 500 million euros that Eutelsat had firmly counted on.

Management has moved quickly to reassure stakeholders, emphasizing that its core strategic growth initiatives are not in jeopardy. This assurance is crucial given the massive capital expenditure program tied to the OneWeb satellite constellation. In mid-January, Eutelsat awarded a contract for 340 satellites to Airbus Defence and Space.

The total expansion program from 2024 through 2029 carries an estimated price tag of 2.0 to 2.2 billion euros. Financing this outlay without the influx from the failed sale will inevitably place greater strain on the company's operational cash flow.

Revised Financial Metrics

The immediate financial consequences are clear. Without the 550 million euro injection, Eutelsat's expected debt burden relative to earnings has increased.

• Leverage Ratio: The ratio of net debt to EBITDA is now forecast to reach approximately 2.7x by the end of fiscal year 2025-26, up from a previous guidance of 2.5x.
• Profitability Forecast: A silver lining exists regarding profitability. Since the assets will remain on Eutelsat's books and no costly service agreement with a buyer is required, a previously expected drag on earnings is avoided. The long-term EBITDA margin for 2028-29 is now projected at about 65 percent, revised upward from 60 percent.

Investors seeking a detailed update on the financial position will need to wait for the half-year results, scheduled for release on February 13, 2026. The company is now in a "Quiet Period" until that date. The forthcoming report will be scrutinized for management's strategy to manage the elevated debt load over the long term.