Eutelsat Secures Major Capital Boost as Government Investors Take Charge

Eutelsat FR0010221234

Satellite operator Eutelsat has concluded a landmark €1.5 billion capital increase, marking the largest such fundraising in the company's history. The move, which was significantly oversubscribed, is designed to fuel the expansion of its low Earth orbit (LEO) business and reduce debt. A fundamental shift in the shareholder register is a key outcome, with state-backed entities now poised to dominate.

The rights issue component of €670 million was covered 133%. A total of 496.1 million new shares were placed with shareholders at €1.35 per share, with 96% of these taken up through the rights offering process. Overall demand reached approximately €892 million.

Key participating investors included:

• The French State: €749 million
• The British Government: €163 million
• CMA CGM Participations: €150 million
• Bharti Space: €150 million

The capital raise substantially bolsters the influence of European governments within Eutelsat. By significantly increasing its stake, the French state has emphasized the company's strategic role in maintaining European sovereignty in space. The fresh capital will help finance planned investments totaling around €4 billion between 2026 and 2029.

Concurrently, Eutelsat aims to lower its leverage ratio to approximately 2.5x EBITDA by the close of the 2025-26 fiscal year. The company's current order backlog remains steady at €3.5 billion.

Diverging Operational Performance

First-quarter results for 2025-26 reveal a tale of two segments. Revenue from the LEO connectivity business surged 70.7% to €54 million. In contrast, the legacy geostationary (GEO) satellite operations contracted, declining by 10.1%.

Total group revenue across its four divisions reached €283 million, representing a slight decrease of 1.2% on a like-for-like basis. The video segment, which still accounts for 47% of total revenue, saw a 10.5% drop. This decline is attributed to the ongoing secular trend away from traditional satellite broadcasting and the impact of new sanctions affecting the Russian market.

African Expansion Gains Momentum

Eutelsat has announced a new contract in Gabon, developed in partnership with Airtel Gabon, to deploy its OneWeb LEO connectivity services on passenger trains. This initiative forms part of a national digitalization strategy led by the Gabonese government and expands the group's footprint across the African continent.

The company's medium-term financial targets are unchanged. Eutelsat continues to aim for revenues between €1.5 billion and €1.7 billion by the end of fiscal year 2028-29, with an EBITDA margin of at least 60%. A clear signal of the firm's strategic redirection is that the connectivity segment already comprises 58% of the total order backlog.

@ boerse-global.de | FR0010221234 EUTELSAT