by Gianluca Lo Nostro and Florence Loeve

GDANSK/PARIS (Reuters) -Eutelsat shareholders widely approved on Tuesday a massive capital increase which must help the European satellite operator in his efforts to compete with his great American rival Starlink.

Supported by France, Eutelsat, however, needs investments from more European countries to challenge Starlink, billionaire Elon Musk, according to analysts and a European parliamentarian.

During a general meeting Tuesday morning, the shareholders of Eutelsat voted at more than 99% the resolutions allowing the implementation of an investment of a total amount of 1.5 billion euros, led by France and in which the United Kingdom also participates. The group hopes that other European countries will follow an example.

Heavily indebted, the French company has concentrated the attention of European governments this year, appearing to be the European alternative possible to reduce dependence on American satellite operators.

During the Bourget Fair in June, French President Emmanuel Macron had expressed his support for Eutelsat, describing him as an issue of sovereignty for Europe.

The capital increase, the realization of which is scheduled for the last quarter of the year, “constitutes the first milestone of a larger strategy,” said the new CEO of Eutelsat appointed in May Jean-François Fallacher at the general meeting of shareholders on Tuesday.

The CEO added that this investment contributed “to the sustainability of the long -term economic model and paved the way for other sources of financing”.

European solution

According to the French MEP Christophe Grudler, of the Renew Europe group, Eutelsat is one of the best answers in Europe to Starlink, but the company needs a political commitment. In February, the European parliamentarian had written a letter to the European Commission, exhorting him to find alternatives to Starlink in Ukraine, while the United States threatened to cut access to the country.

“France’s decision to strengthen its participation is a strong political act, but that cannot stop there. Germany and the other member states must also take over. A country alone cannot carry this continental ambition in space,” Christophe Grudler told Reuters.

As part of the capital increase which must be approved on Tuesday and will take place in two stages, France will undertake to pay a total of 750 million euros to reach a participation of 29.65% in Eutelsat, while the United Kingdom will contribute to 163.3 million euros to reach a participation of 10.89%.

Bharti Space, property of the Indian billionaire Sunil Mittal, the French shipowner CMA CGM, and the strategic participation fund, created by several insurers, will also participate.

Bond d’Eutelsat on the stock market

Eutelsat, which in addition to his new CEO, appointed a new chairman of the board of directors in September, confirmed to Reuters his desire to obtain the support of more European countries.

However, the group said that exchanges with other potential partners remain “in terms of approaches”.

Jean-François Fallacher had indicated to the world in September that first discussions between France and Germany had taken place during the Council of Franco-German ministers in Toulon on August 29.

The German and French governments did not respond to requests for comments from Reuters.

The shareholders involved in the current capital increase refused to comment.

Fallen at a historic minimum in early 2025, the Eutelsat action had jumped spectacularly in March, when the idea of ​​finding a European alternative to Starlink was discussed.

Germany already finances Ukraine’s access to Eutelsat, which has delivered thousands of terminals in the country.

Support from France

Asked about the fall of the French government, Eutelsat told Reuters not to be “directly impacted by the change of government, even if a new minister will take the lead from the Ministry of the Armed Forces”.

“In general, a company prefers government stability to guarantee the continuity of exchanges at the political level and to remain identified by the latter,” said the group, depending on the commitment and financial support of France.

Questioned on the consequences of a possible budgetary blocking on its recapitalization plan, Eutelsat said that it was “unlikely” that the calendar of the capital increase, which must be launched after its validation by the general meeting on Tuesday, “is impacted by a blockage at this stage”, stressing that a potential budget block would relate to next year and not the current year.

This capital increase should make it possible to reduce the debt of Eutelsat, which reaches 2.6 billion euros, and to contribute to the deployment of 340 satellites in low orbit (Leo) for its Oneweb constellation, at a cost of more than 2 billion euros.

Eutelsat acquired OneWeb in 2023 to capitalize on the growing demand for the Internet by satellite.

With just over 650 satellites, Oneweb has a much lower network than that of Starlink, of around 8,000 satellites.

For Aleksander Peterc, analyst at Bernstein, the support of France and the United Kingdom significantly changes the situation, but the funding during the next decade will depend on the improvement of the profitability and cash of Eutelsat.

“The addition of Germany as a main shareholder would consolidate Eutelsat’s position more as the leading European Sovereign Sovereign of Connectivity Leo,” he said.

An analyst of Stifel, Antoine Lebourgois, was more prudent, saying that the capital increase was a short -term rescue buoy and not a long -term remedy.

“The support of European governments is a crucial first step and a strong signal, but it may not be enough to guarantee the long-term viability of Oneweb,” he said.

“Given the intense competition and the economies of scale of actors like Starlink, Oneweb will probably need a more substantial and more sustained commitment from the public sector to truly prosper as a European Alternative,” added Antoine Lebourgeois.

(Gianluca Lo Nostro in Gdansk, Florence Lève in Paris, with the contribution of Gus Cheapiz in Paris; written by Florence Lève, edited by Kate Entringer and Augustin Turpin)

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