Embattled European satellite operator Eutelsat, which merged with LEO satellite operator OneWeb in 2023, has announced plans to raise €1.35 billion in new funding, with the French government committing a substantial share. The move comes less than 24 hours after Eutelsat signed a 10-year framework agreement with France’s defence procurement agency worth up to €1 billion for priority-access secure military communications.
Eutelsat has come under increasing pressure since its 2023 merger with OneWeb, as investor confidence has waned and the company’s share price has declined sharply. Analysts have raised concerns about the group’s ability to execute its combined geostationary and low Earth orbit satellite strategy amid rising debt, constrained capital, and intensifying competition from Starlink. The question of Eutelsat’s survival is tied to the success of the European Commission’s IRIS2 constellation, as the company is a major part of the SpaceRISE consortium tapped to develop it.
On 18 June, the company announced that it had signed a 10-year framework agreement with the French defense procurement agency (DGA), which is valued at up to €1 billion in expenditure. According to the Eutelsat press release, the agreement covers the supply of priority-access space resources, with a specific focus on capacity from the OneWeb LEO constellation. It also allows for provisions to upgrade and secure the constellation for military-grade use.
“We are honored at the prospect of supporting the French armed forces through this historic agreement, which underscores the crucial role of low Earth orbit satellite capacity in responding to the requirements of contemporary operational theaters,” said Eutelsat CEO Jean-Francois Fallacher.
On 19 June, Eutelsat announced plans to raise €1.35 billion in new capital by the end of 2025 to support its long-term strategy and reduce debt. According to the company, the raise will take place in two stages: first, a group of major investors, including the French government via APE, Bharti Space, shipping group CMA CGM, and FSP, has committed to invest €716 million through a reserved share sale at a fixed price. In the second stage, those same investors are expected to participate in a €634 million rights issue, which will give them the opportunity to purchase additional shares. Ahead of the transaction, the French government will acquire Eutelsat shares currently held by state-owned investor Bpifrance, with a representative from the state set to take its seat on the company’s board.
“The French State is proud to contribute to strengthening Eutelsat’s capital structure and support the company at a pivotal stage of its development,” said Eric Lombard, Minister for the Economy, Finance, and Industrial and Digital Sovereignty. “This transaction reflects our strong commitment towards a major player in satellite connectivity, a strategic sector at the heart of Europe’s digital sovereignty.”
Although Eutelsat’s board has unanimously approved the capital raise and investor commitments are in place, the transaction remains subject to shareholder approval at an extraordinary general meeting expected later this year. Regulatory clearance will also be required before the transaction can be finalised.
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