Eutelsat’s shares experienced a remarkable surge on Friday following the French government’s announcement of a $1.55 billion capital injection into the financially troubled satellite firm. This move is set to revitalize Europe’s leading contender to compete with Starlink.
French President Emmanuel Macron emphasized the importance of bolstering European sovereignty by urging nations and corporations to invest in Eutelsat.
Simultaneously, discussions are underway between France and the United Kingdom regarding the British government’s potential involvement in Eutelsat’s rights issue.An announcement about this collaboration could coincide with President Macron’s planned state visit to the UK in July. The UK currently holds a 10.9% stake in Eutelsat.
Eutelsat’s stock saw an impressive 27.5% rise during the trading session on Friday, contributing to a 59.61% year-to-date increase.
Insights from Bualuang Securities
Eutelsat has announced a substantial capital increase of approximately $1.55 billion, whereby the French state will retain nearly a 30% stake in the company. This financial boost is anticipated to enhance Eutelsat’s financial stability by potentially reducing the net debt-to-EBITDA ratio from 4 times to 2.5 times.
The firm foresees that this development should alleviate market concerns surrounding Thaicom Public Company Limited (SET: THCOM), as its Thaicom-10 satellite derives around 50% of its revenue from Eutelsat. Moreover, the ongoing border tensions between Thailand and Cambodia might present THCOM with opportunities to increase its revenue through ground security contracts.
