Eutelsat Shares Face a Turbulent Day of Reckoning

Eutelsat FR0010221234

Today marks a critical juncture for satellite operator Eutelsat as the trading period for subscription rights linked to its ongoing capital increase draws to a close. The share price is being shaped by a clash of two powerful forces: substantial selling pressure from a major investor is being met with equally strong backing from a consortium of state-backed anchor shareholders.

A significant buffer against market volatility comes from a strategic alliance of key investors. This group has committed to underwriting approximately 71% of the new share issuance. The guaranteed subscribers include the French state (via Bpifrance/APE), the British government, Bharti Space Ltd, and CMA CGM Participations.

This coalition highlights Eutelsat's political and strategic importance as a European infrastructure asset, a status further cemented by its ongoing integration with OneWeb. Being viewed as a systemically relevant operator offers crucial support for the equity during this transitional phase.

SoftBank's Partial Exit Creates Market Waves

Counteracting this support, the actions of SoftBank Group Capital have weighed heavily on the stock this week. Rather than fully participating to maintain its stake, the subsidiary of the Japanese technology conglomerate sold roughly 36 million subscription rights.

This move carries two immediate consequences for the market:
* Stake Dilution: By not taking part in the capital measure in full, SoftBank's proportional ownership in Eutelsat will decrease.
* Supply Overhang: The sudden influx of rights onto the market required absorption by other participants, creating transient but pronounced downward pressure on the share price.

Terms of the Offer and a Credit Rating Boost

The primary objective of the capital increase is debt reduction. Investors have until December 9 to subscribe for new shares at a price of €1.35, with an allocation ratio of 8 new shares for every 11 held. This deeply discounted subscription price, relative to historical trading levels, represents a significant theoretical discount for participating shareholders.

In a positive development, rating agency Moody's has upgraded Eutelsat's credit rating to Ba3 with a stable outlook. Analysts cited the improved capital structure expected after the capital raise and the company's designation as a "Government-related Issuer," which typically facilitates better refinancing conditions.

Key Deadlines for Shareholders

For equity holders, today is the final opportunity to trade subscription rights on the exchange. Any rights that are neither exercised nor sold by the subscription deadline on December 9 will become worthless, resulting in a total loss of their value. Until the new shares are fully placed, Eutelsat's stock is likely to remain sensitive to the ongoing tension between the supply of outstanding rights and the demand from the anchor investor group.