The cash is part of a €1.35 billion two-part capital raising scheme that sees Paris take its holding from 13.6 per cent to nearly 30 per cent. Not bad for a company that’s haemorrhaging cash and still playing catch-up with Starlink.
The move follows hot on the heels of a 10-year military satellite comms deal signed between the French government and OneWeb. No one’s saying how much the contract’s worth, but the market liked it enough to boost shares by 14 per cent.
Eutelsat’s coffers have been rattling loudly since it splashed out on OneWeb and watched its old-school broadcast revenue fall off a cliff. The company’s net debt had crept towards four times earnings, making it nearly impossible to rustle up the €2 billion needed to maintain OneWeb’s fleet. Then there’s another €2 billion bill looming for Europe’s next-gen Iris2 constellation.
As part of the fix-up, the French are moving their stake from Bpifrance to the APE, which means more state oversight and less fluff. France’s economy minister Eric Lombard said the deal shows Paris’s commitment to satellite connectivity, calling it “a strategic sector at the heart of Europe’s digital sovereignty.”
New Eutelsat boss Jean-François Fallacher chimed in saying the extra cash would make the company “a central player in the development of the European sovereign space of tomorrow.”
Meanwhile, Britain’s once-grand rescue of OneWeb now looks more like a footnote. The UK’s stake in Eutelsat is set to fall from 11 per cent to 7.9 per cent, despite coughing up in 2020 to save OneWeb from going bust. The UK can still get in on the rights issue later this year, but no one’s holding their breath.
The capital raise comes in two chunks: €716 million in a reserved sale at €4 a share (a 32 per cent premium on the 30-day average), followed by a €634 million rights issue open to all investors. Core shareholders including India’s Bharti are also chipping in.
Eutelsat expects to drag in between €1.5 billion and €1.7 billion in revenue by the end of the 2028/29 financial year, assuming no one else needs another billion to keep the lights on in orbit.