Eutelsat plans €1.35 billion capital raise to fund LEO strategy

PARIS - Satellite operator Eutelsat Group announced Thursday it is planning a €1.35 billion capital increase to strengthen its financial position and support its strategic focus on low Earth orbit (LEO) satellite connectivity.

The capital raise will consist of a €716 million reserved capital increase at €4 per share, representing a 32% premium to the 30-day average share price, followed by a €634 million rights issue. The French government through its investment arm Agence des Participations de l’Etat (APE) will be the largest contributor with a €526.4 million investment.

Other key investors include Bharti Space Limited, CMA CGM, and Le Fonds Stratégique de Participations (FSP). Following completion of both transactions, the French state would hold approximately 30% of Eutelsat’s capital and voting rights, with Bharti Space Limited holding 18.7%.

The company aims to complete the capital raise by the end of 2025, subject to shareholder approval at an extraordinary meeting expected in the third quarter of this year.

Eutelsat, which operates a fleet of 34 geostationary satellites and more than 600 LEO satellites, is positioning itself to capitalize on the growing satellite connectivity market. The company claims the global LEO business-to-business connectivity market, valued at over $2.1 billion in 2025, is expected to grow at 28% annually through 2029.

"Eutelsat enters a new chapter, centered on the deployment of LEO, a major innovative and technological revolution for the satellite industry," said Jean-François Fallacher, CEO of Eutelsat Group, in a statement included in the press release.

The capital increase is intended to accelerate Eutelsat’s deleveraging, reducing its net debt to EBITDA ratio to approximately 2.5 times by the end of fiscal year 2025-26. The funds will support investments in LEO capabilities and the future IRIS² constellation, a European Union satellite initiative.

Eutelsat confirmed its financial outlook for fiscal year 2024-25, with operating vertical revenues expected to remain at similar levels to the previous year. For fiscal year 2025-26, the company anticipates revenues in line with 2024-25, with LEO revenues projected to grow by 50% year-on-year.

The company’s shares are listed on both Euronext (EPA:ENX) Paris and the London Stock Exchange (LON:LSEG) under the ticker ETL.

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