French Government Veto Forces Eutelsat to Revise Financial Strategy

Eutelsat FR0010221234

A major transaction for European satellite operator Eutelsat has been blocked by French authorities, citing national security. The government's intervention prevents the sale of the company's passive ground infrastructure to investment firm EQT, scuppering a deal worth €550 million and compelling Eutelsat to update its debt guidance.

The proposed agreement with EQT Infrastructure VI, initially announced in August 2024, was ultimately vetoed by the state. Finance Minister Roland Lescure clarified the government's position, classifying the ground antenna assets as strategic due to their dual-use potential for both civilian and military applications. Official circles view Eutelsat as Europe's sole credible competitor to Elon Musk's Starlink network, making the transfer of control over these assets to a financial investor unacceptable.

This decision leaves a €550 million funding gap. In response, Eutelsat has promptly adjusted its financial targets:

• Revised Leverage: The net debt to EBITDA ratio is now forecast to be approximately 2.7x by the close of the 2025/26 fiscal year, up from a previous expectation of 2.5x.
• Improved Margin Forecast: With the revenue-generating assets remaining on the balance sheet, the projected EBITDA margin for the 2028/29 fiscal year has been raised to around 65%, compared to an earlier estimate of 60%.

Core Operations and Investments Unaffected

Management has stressed that the collapsed deal does not jeopardize its planned investment program. Funding for key projects, particularly the expansion of the OneWeb satellite constellation, remains secure. This assurance follows a significant contract awarded to Airbus Defence and Space in mid-January for the construction of 440 LEO satellites. Production at the Toulouse facility is scheduled to commence by the end of 2026, delivering technologically upgraded units.

Attention now turns to the company's upcoming half-year results, scheduled for release on February 13, 2026. Market analysts are expected to scrutinize Eutelsat's revised strategy for debt reduction in the absence of the anticipated €550 million inflow from EQT.

@ boerse-global.de | FR0010221234 FRENCH