French Government Intervention Derails Eutelsat’s Debt Reduction Strategy

Eutelsat FR0010221234

A major transaction intended to bolster the balance sheet of satellite operator Eutelsat has been formally blocked. The French government exercised its veto power, citing national security, to prevent the sale of critical ground infrastructure to financial investor EQT. This decision forces the company to revise its debt projections and forgo anticipated proceeds.

The definitive collapse of the deal with EQT Infrastructure VI represents a significant setback for Eutelsat's financial planning. Authorities in Paris refused to grant the required approval, expressing concerns over the transfer of ownership for antenna assets used for both civilian and military communications. The state was unwilling to see this strategically sensitive infrastructure fall under the control of a private equity firm.

As a direct consequence, Eutelsat will not receive the approximately €550 million in net proceeds it had counted on from the sale. These funds were a cornerstone of the company's strategy to improve its financial structure during its ongoing corporate transformation.

Revised Financial Metrics and a Silver Lining

The loss of this revenue stream has an immediate impact on the company's leverage outlook. Management has adjusted its forecast for the net debt-to-EBITDA ratio for the close of the 2025/26 fiscal year. Instead of the previously targeted ratio of 2.5, the group now anticipates a level of approximately 2.7.

However, the failed sale carries a potential long-term benefit. By retaining ownership of the revenue-generating ground stations, Eutelsat has upgraded its forecast for EBITDA margin in the 2028/29 fiscal year. The projection has been raised from 60% to around 65%. Company officials also emphasized that funding for planned growth investments remains secure despite the transaction's failure.

Setback Occurs During Critical OneWeb Integration

This development comes at a challenging time for Eutelsat, as it navigates the complex integration of low-Earth orbit (LEO) satellite operator OneWeb. The company is currently building its position as a combined provider of geostationary (GEO) and LEO satellite services—a capital-intensive process where the EQT infusion would have provided welcome financial flexibility.

Market attention now turns to February 13, 2026. On this date, Eutelsat is scheduled to present its half-year financial results and must detail its revised, concrete path for debt reduction in the absence of the ground infrastructure sale.

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