French Government Halts Eutelsat’s Infrastructure Sale on Security Grounds

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A major transaction for satellite operator Eutelsat has been blocked by the French state, citing national sovereignty and security concerns. The move prevents the planned divestment of the company's passive ground infrastructure to the investment firm EQT, a deal that had been in development since 2024. For shareholders, the intervention carries direct financial consequences, forcing Eutelsat to revise its key forecasts.

The collapse of the sale has immediate implications for the company's balance sheet. A net cash inflow of approximately 550 million euros will now not materialize. This shortfall directly impacts Eutelsat's anticipated leverage ratio. The company now expects its Net Debt/EBITDA to reach around 2.7x by the close of the 2025/26 fiscal year, a revision from a previous target of 2.5x.

Conversely, Eutelsat has raised its longer-term profitability outlook. The projected EBITDA margin for the 2028/29 period is now set at roughly 65%, up from the earlier estimate of about 60%. Management attributes this 5-percentage-point increase to anticipated savings from eliminated leasing expenses over a three-year span. The company has stated that its ability to fund strategic growth investments remains unaffected by the terminated deal.

National Security Interests Cited as Rationale

Eutelsat confirmed on Thursday that the transaction would not proceed. The following day, French Finance Minister Roland Lescure provided the government's justification. He emphasized that the ground antenna infrastructure is utilized for both civilian and military communications, framing the decision as a matter of national security and French sovereignty.

Lescure further characterized Eutelsat as Europe's sole competitor to SpaceX's Starlink, underscoring its strategic importance. On the social media platform Bluesky, he clarified that the move was not directed against EQT but was instead a response to the proposed sale of what the state deems critical infrastructure.

Key Financial Implications:
* The planned sale of passive ground assets to EQT has failed after certain conditions were not met.
* Net proceeds of €550 million will not be received.
* Revised Net Debt/EBITDA forecast for FY 2025/26: ~2.7x (was 2.5x).
* Revised EBITDA Margin forecast for FY 2028/29: ~65% (was ~60%).

Strategic Context: State Influence and OneWeb Expansion

The French government's significant stake in the company, amounting to 29.6%, makes its influence tangible. This is further reinforced by a ten-year contract with the French military worth €1 billion for satellite services, highlighting the asset's defense relevance.

Separate from the grounded infrastructure deal, Eutelsat recently placed a substantial satellite order. In mid-January, the company contracted Airbus to build an additional 340 OneWeb satellites. Combined with a prior order for 100 units, the total commitment now stands at 440 satellites, scheduled for delivery starting in late 2026. This procurement aims to ensure the operational continuity of the OneWeb constellation, which currently consists of more than 600 satellites.