A significant capital increase at satellite operator Eutelsat has created a complex and contrasting picture for its shareholders. The situation highlights a divergence between a major investor’s caution and a sovereign boost to the company’s financial standing.
Sovereign Support Earns a Credit Boost
In a key development providing fundamental support, rating agency Moody’s upgraded Eutelsat’s credit rating from B2 to Ba3. Analysts point to the shifting shareholder landscape as the primary driver for this optimistic reassessment.
The capital measures will see the French state, acting through BPI/APE, become the dominant shareholder with a stake approaching 30 percent. Market experts view this increased state influence as a crucial safety net for the firm. Eutelsat is positioning itself as a European competitor to Elon Musk’s Starlink following its merger with OneWeb. The primary objective for the newly raised capital is to reduce the group’s net debt to approximately 2.5 times its EBITDA over the medium term.
A Major Investor Sends a Signal
Contrasting with the state’s expanding role, the actions of a major existing investor have introduced uncertainty. The SoftBank Group, a significant Japanese shareholder, decided against participating in the capital increase and did not inject fresh funds. Instead, the corporation sold approximately 36 million subscription rights on the market.
Should investors sell immediately? Or is it worth buying Eutelsat?
This move is interpreted by observers as a clear message: while SoftBank remains invested, it is unwilling to increase its risk exposure to Eutelsat at this time. The substantial supply of these rights exerted noticeable pressure on the share price, which slid to a weekly low of €1.88 before recovering to €2.12 by the week’s end.
Key Terms of the Capital Increase:
* Total Volume: The raise aims to secure roughly €670 million.
* Subscription Ratio: Shareholders receive 8 new shares for every 11 existing shares held.
* Price: The subscription price is set at €1.35 per new share.
* Deadline: The subscription period concludes on Tuesday, December 09.
Investor attention is now fixed on the closure of the subscription period on December 09 and the subsequent issuance of new shares mid-month. The low €1.35 subscription price may continue to exert technical downward pressure on the stock’s listing in the near term.
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