The share price of European satellite operator Eutelsat is currently caught between two powerful and opposing market forces. On one side, a significant credit rating upgrade provides a fundamental vote of confidence. On the other, substantial selling pressure from a major shareholder and a dilutive capital increase are weighing on the equity. The stock is presently trading around €2.08.
Strategic Backing Earns Credit Rating Improvement
In a notable development for the company’s financial standing, Moody’s Investors Service has elevated Eutelsat’s corporate family rating. The agency raised it from B2 to Ba3, citing a crucial shift in the shareholder structure. The French state now holds a 29.65% stake, which Moody’s interprets as an implicit level of government support. This has led to Eutelsat being classified as a “Government-Related Issuer,” a status that meaningfully reduces its perceived default risk.
Management has concurrently outlined a clear debt reduction path, targeting a leverage ratio of 2.5x Net debt to EBITDA by the 2026 financial year. This strategic focus aims to rebuild financial flexibility and create a more stable credit profile over the medium term.
SoftBank Liquidation Creates Immediate Selling Overhang
The positive sentiment from the rating action, however, is being counteracted by a major technical sell-off. SoftBank Group Capital is in the process of offloading approximately 36 million subscription rights linked to Eutelsat’s ongoing capital increase. This move indicates the Japanese technology investor is choosing not to maintain its proportional stake by participating in the raise, opting instead to generate immediate liquidity.
This large volume of rights hitting the market is exerting direct downward pressure on the share price. Arbitrage activity, which seeks to profit from pricing discrepancies between the rights and the ordinary shares, is further amplifying volatility. The subscription period remains open until 9 December 2025, suggesting this technical overhang could persist.
Should investors sell immediately? Or is it worth buying Eutelsat?
Details of the Dilutive Capital Increase
The company is conducting a €670 million capital increase, a key component of a broader €1.5 billion financing plan. The new shares are being offered at a subscription price of €1.35, representing a steep discount to the current market price above €2.00. This pricing mechanism inevitably leads to earnings per share dilution, as the value of existing shares adjusts to a blended average.
Key terms of the capital measure:
* Total financing package: €1.5 billion
* Rights issue volume: €670 million
* Subscription price per share: €1.35
* Subscription deadline: 9 December 2025
Long-Term Growth Strategy Remains Intact
Looking beyond the current capital market activity, Eutelsat’s leadership maintains an ambitious growth trajectory. The expansion of its OneWeb low-Earth orbit (LEO) satellite constellation, coupled with major government contracts such as the European IRIS² initiative, form the core of this plan. The objective is to boost annual revenue by 29% to €1.6 billion by 2029, while sustaining a robust EBITDA margin above 60%.
The recent upgrade from Moody’s can be seen as an endorsement of this long-term strategic direction. In the near term, however, the technical selling pressure from SoftBank’s actions is dominating price action. Investors should anticipate continued share price fluctuations until the subscription period concludes on 9 December.
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