PARIS (Reuters) – Eutelsat climbed on Friday on the Paris Stock Exchange after the French government announced that it was going to become the first shareholder of the satellite group, a decision to help the company compete with the Starlink network of Elon Musk.
At 10:13 a.m. GMT, the action increased by 27.46%.
The Ministry of Finance announced Thursday evening that the State was going to subscribe to more than half of a capital increase of 1.35 billion euros announced by the company.
“It is an issue of sovereignty, it is an industrial issue, it is an issue that we support,” said President Emmanuel Macron during his visit to the International Aeronautical and Le Bourget space on Friday.
The President added “mobilizing many other European and international partners”, saying that “Eutelsat is the only player who is non-American and non-Chinese” with a network of telecommunications satellites in low orbit.
“By strengthening the capital of Eutelsat, the only European actor in constellations in Low Orbit, France ensures its strategic independence and prepares that of Europe!”, Had also wrote Emmanuel Macron on Friday on X.
The Eutelsat action had already jumped 14.5% Thursday after the announcement the day before a framework agreement with the French Ministry of the Armed Forces for the Nexus project, intended to supplement the Syracuse military satellites in geostationary orbit by a constellation of satellites in low orbit.
According to Alessandro Cuglietta, analyst at Kepler Cheuvreux, French support for the capital increase should give the company greater financial flexibility.
JP Morgan is however more mixed and notes that Eutelsat expects that his debt level be reduced to approximately the annual profits after the capital increase, against four times currently and five times by mid-2026.
“We have trouble considering this rights program as sufficient to support what we consider as a really competitive Leo strategy,” writes the broker.
Eutelsat, from the merger between the satellite operator and the Oneweb network, plans to launch the second generation of Leo satellites by the end of the decade.
However, the group said it needed more than three times the number of satellites initially envisaged, which would require up to 2.2 billion euros in funding.
(Written by Makini Brice and Anna Peverieri; Diana Mandia and Florence Lève)
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