French Government Veto Derails Eutelsat’s Strategic Asset Sale

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A major transaction for European satellite operator Eutelsat has been abruptly cancelled following direct intervention from the French state. The government's move, driven by strategic security concerns, blocks the sale of the company's ground infrastructure and forces a sudden revision of its near-term financial planning. Investors are now tasked with reassessing the company's balance sheet metrics in light of this development.

The French Ministry of Finance, led by Roland Lescure, issued a clear veto at the end of January. The government's rationale centered on Eutelsat's position as Europe's sole competitor to SpaceX's Starlink, deeming it a strategic national asset. The ground antenna infrastructure in question is utilized for both civilian and military communications. Consequently, the state prohibited its sale to the private equity firm EQT Infrastructure VI. Holding a stake of nearly 30 percent, France is the dominant single shareholder and leveraged its influence to maintain control over this critical hardware.

Immediate Financial Repercussions

The collapse of the deal carries direct financial consequences. Eutelsat will forgo approximately €550 million in net proceeds, which were earmarked for debt reduction. On a positive note, the company will avoid incurring annual leasing costs of up to €80 million that would have been required post-sale.

In response, management has adjusted its debt guidance. The net debt-to-EBITDA ratio is now projected to be around 2.7x by the close of the current fiscal year, a slight increase from the previous target of 2.5x. Looking ahead to the 2028-29 fiscal year, the company maintains a medium-term target for an EBITDA margin of approximately 65 percent.

Orbital Expansion Continues Unabated

Despite setbacks on the ground, Eutelsat is pressing forward with the expansion of its Low Earth Orbit (LEO) satellite constellation. Airbus Defence and Space has been awarded a contract to build an additional 340 OneWeb satellites. Combined with an order placed in December, the total order volume now stands at 440 units. These new models will feature enhanced digital processing capabilities, with deliveries scheduled to commence by the end of 2026.

Market attention now turns to Thursday, February 13, 2026, when Eutelsat is set to release its half-year results. Key points for scrutiny will be whether the company achieved its forecasted 50 percent revenue growth in the LEO segment and how the executive board recalibrates its long-term financing strategy following the failed divestment.