Eutelsat's €1.35 billion fundraising could potentially aid OneWeb in achieving profitability
Eutelsat Raises €1.35B Fund to Fuel Satellite Replacement and Long-term Growth
In a significant move, satellite operator Eutelsat has announced plans to raise a substantial €1.35 billion fund. This fund will primarily be used to finance the replacement of satellites in its OneWeb Low Earth Orbit (LEO) constellation.
The fundraising effort is part of Eutelsat's strategy to restructure its finances, enabling the company to execute on its long-term growth plan, known as its "telecom pivot." This strategy aims to decrease Eutelsat's debt-to-adjusted EBITDA ratio from the current 4x to a more manageable 2.5x by June 2026.
Eutelsat's financial overhaul includes the sale of passive ground station assets for €500 million, a move aimed at boosting cash in the short term. Additionally, after an initial €2 billion investment, Eutelsat is expected to invest an additional €2.2 billion in the EU-led satellite communication constellation programme, IRIS.
The replacement of satellites is projected to cost €2 billion over a four-year period. Eutelsat has ordered 100 satellites from Airbus and plans to purchase an additional 340 to launch before 2029.
In other developments, Eutelsat's fixed and mobile connectivity revenues are on the rise, while video revenues are declining. This shift in revenue streams mirrors the broader trend towards digitalisation and the increasing demand for high-speed, reliable connectivity solutions.
It's worth noting that Eutelsat's credit rating has been downgraded by Fitch Ratings in March. However, the two-part fundraise will deepen the French government's stake in the company from 13% to nearly 30%. The identity of the CEO leading these changes was not available in the search results.
This strategic move by Eutelsat underscores the company's commitment to adapting to the evolving satellite communication landscape and positioning itself for long-term success in the telecom sector.
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