French Government Intervention Halts Eutelsat’s Infrastructure Sale

A major transaction central to Eutelsat's financial planning has been blocked by French authorities. The satellite operator will not be permitted to sell its passive ground infrastructure assets to the investment firm EQT, a decision that forces the company to recalibrate its debt reduction targets. This development coincides with Eutelsat's continued push to expand its OneWeb low-Earth-orbit constellation, underscored by a significant new manufacturing contract.

In late January, Eutelsat announced the collapse of its planned sale to EQT Infrastructure VI, citing unmet suspensive conditions. The underlying reason, however, was a direct government intervention. French Minister for Industry Roland Lescure clarified the stance, characterizing ground antenna assets as strategic infrastructure crucial for both civilian communications and military applications. Sovereignty concerns were cited as the definitive reason for prohibiting the transaction.

Financial Forecasts Recalibrated

The failed deal carries direct consequences for the group's balance sheet metrics. Eutelsat forfeits potential proceeds of approximately 550 million euros. Conversely, it will avoid the planned annual service fee of 75 to 80 million euros that was part of the agreement.

The company's updated guidance reveals the financial impact, emphasizing balance sheet adjustments over changes to its investment program:

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• Net Debt/EBITDA Ratio: The forecast for the end of fiscal year 2025/26 is now approximately 2.7x, up from a previous target of 2.5x.
• Long-Term EBITDA Margin (FY 2028/29): The outlook has been raised to around 65%, compared to the earlier projection of roughly 60%.

Management stressed that the funding for planned investments remains secure and is unaffected by the transaction's failure. The revised leverage target, however, signals a heightened focus on debt management following the loss of a substantial one-time financial inflow.

OneWeb Expansion Maintains Momentum

Operationally, Eutelsat is advancing its growth strategy in the competitive LEO satellite sector. The company has confirmed a major order with Airbus Defence and Space for 340 additional LEO satellites destined for the OneWeb network.

Deliveries for this new batch are scheduled to commence from the end of 2026. This expansion aims to modernize the existing in-orbit fleet of over 600 satellites and ensure service continuity. The segment is demonstrating strong commercial traction; revenue for the LEO business surged by about 71% year-over-year during the first quarter of fiscal 2025/26.

Market attention will now turn to Eutelsat's interim results for 2025/26, due for release on February 13. These figures are expected to provide further detail on the updated debt strategy and the ongoing momentum within the company's LEO operations.