Eutelsat Shareholders Face Critical Deadline on Rights Issue

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A pivotal deadline arrives today for investors in Eutelsat. Trading in the rights for the satellite operator's ongoing €670 million capital increase will conclude on the Euronext Paris exchange at 17:30. This follows a week of significant market pressure, triggered when major shareholder SoftBank offloaded approximately 36 million subscription rights onto the market—a move that drove the share price down by over 7% mid-week.

The terms of the rights issue are as follows:
* Subscription price for each new share: €1.35
* Ratio for the offering: 8 new shares for every 11 existing shares held
* Subscription period deadline: December 9, 2025
* Total volume of the raise: €670 million

Shareholders who neither sell nor exercise their subscription rights before today's market close face the near-total depreciation of those rights' value.

Strategic Rationale and Credit Response

The fresh capital is intended to accelerate debt reduction. Company management aims to lower the leverage ratio from the current 4.0x to approximately 2.5x by the close of the 2025-26 fiscal year. Despite the substantial dilution effect for existing shareholders, the move has received a positive reception from credit rating agencies.

Moody's upgraded Eutelsat's long-term rating from B2 to Ba3, while Fitch raised its rating to BB. The agencies cited the strategic importance of the French state becoming the largest single shareholder with a stake nearing 30%, reinforcing Eutelsat's role in European space infrastructure.

Market Dynamics and Analyst Outlook

The current capital increase follows a reserved capital raise of €828 million that was completed on November 21. In that earlier transaction, anchor investors, including the French state and Bharti Space, subscribed at a price of €4.00 per share—significantly above the current €1.35 subscription price.

The market has experienced heightened volatility. The flood of sell orders from SoftBank's placement of rights, equivalent to roughly 26 million shares and nearly half of its holding, weighed heavily on the stock. However, a technical rebound emerged on Thursday, with shares gaining nearly 6%.

In light of these developments, JPMorgan upgraded its rating on the stock to "Neutral," assigning a price target of €1.90.

Settlement Timeline and Forward View

The subscription period for the rights issue concludes on December 9. The newly issued shares are scheduled to begin trading on the Euronext Paris on December 16, followed by the London Stock Exchange a day later. Market volatility is expected to remain elevated until the new shares are fully absorbed.

The long-term investment thesis for Eutelsat now hinges on the successful integration of OneWeb and the subsequent rollout of its Low Earth Orbit (LEO) services delivering the promised revenue growth.