The Eutelsat Group has finalized its equity increase, with the newly issued shares commencing trading in Paris today. This move allows the satellite operator to meet its €1.5 billion equity target, providing crucial financial flexibility. The company’s focus now shifts to leveraging this strengthened balance sheet to fund key growth initiatives, including its OneWeb and IRIS² projects.
Investor Demand Exceeds Expectations
Eutelsat has confirmed the successful completion of its rights issue, which raised approximately €670 million. The transaction was met with robust investor appetite, concluding with an oversubscription rate of 133%.
Key details of the offering are as follows:
- Gross proceeds from the rights issue: circa €670 million
- Issue price per new share: €1.35
- Number of new shares issued in this tranche: nearly 496 million
- Total equity target (including prior measures): €1.5 billion achieved
The new shares began trading on Euronext Paris under their regular listing today. Upon announcement, the subscription price was set at a noticeable discount to the prevailing share price. This discount, coupled with the substantial number of new shares entering the market, contributed to significantly elevated share price volatility in recent weeks.
This rights issue follows a reserved capital increase in November that raised roughly €828 million from anchor investors, including the French state (via APE), Bharti Space, and CMA CGM. Combined, these measures fulfill the total planned volume of the refinancing package. Admission of the new shares for trading on the London Stock Exchange is scheduled for tomorrow.
Strengthening the Balance Sheet for Future Growth
While the capital increase results in meaningful dilution for existing shareholders, its primary purpose is balance sheet reinforcement. Eutelsat recently reported a net debt to EBITDA ratio of approximately 3.9x. Management aims to use the fresh capital to reduce this leverage to around 2.5x by the close of the 2025/26 fiscal year.
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This strategic de-risking of the company’s financial structure provides necessary headroom for its ongoing investment programs. In anticipation of the transaction, Deutsche Bank adjusted its rating on the stock from “Sell” to “Hold,” citing the capital raise’s role in mitigating balance sheet risks, even as investment expenditures are expected to remain elevated in the medium term.
Funding the Next Generation of Satellite Connectivity
A significant portion of the raised capital is earmarked for expansion in Low Earth Orbit (LEO). Strategic priorities include:
- Financing the next-generation satellite constellation for OneWeb.
- Participation in the European IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) project.
Both programs are central to Eutelsat’s future positioning in the satellite connectivity market. Early operational validation is emerging, such as recent partnership announcements to support aid missions in Sri Lanka using Eutelsat/Airtel LEO connectivity. The coming quarters will be critical in determining the scale at which these ambitious projects translate into tangible revenue growth.
Market Absorption and the Path Forward
With the new shares now freely trading, some of the technical selling pressure typical during a rights issue period—often driven by arbitrage activity—is likely to subside. However, the market must now absorb a considerable overhang of new equity.
Consequently, short-term volatility may persist until this additional supply is fully digested. From a chart perspective, the stock will need to establish a new support level following the capital measure before a clearer directional trend can emerge.
The operational execution in the coming months takes center stage. Success will be measured by progress on the planned debt reduction, the realization of OneWeb integration synergies, and advancements in the IRIS² program. If these efforts lead to visible improvements in profitability and cash flow generation, the refinancing completed today will have achieved its core strategic objective.
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