Eutelsat secures €1.5B capital raise and African connectivity deal ahead of holidays

Eutelsat has made two key moves ahead of the holiday season. The satellite operator signed a new connectivity deal in Africa and completed a major capital increase. These steps come as analysts watch the company's financial strategy and share performance closely.

Eutelsat recently finalised a €1.5 billion capital raise in early December. The funds will go towards reducing debt, financing the OneWeb satellite constellation, and supporting the European IRIS² defence programme. Despite this injection, the share price remains under pressure from the capital increase itself.

The company also agreed to a letter of intent with Clear Blue Technologies to expand connectivity services in Africa. The initial order is valued at around CAD 1 million, with potential to grow to 15,000 systems over three years.

Meanwhile, Bharti Space Limited has strengthened its position as the second-largest shareholder. The firm now holds roughly 17.88% of Eutelsat's shares after buying 88.7 million at €1.35 each. The French state stays the largest investor, owning just under 30%.

Analysts from Oddo BHF and BNP Paribas have set price targets of €1.70 and €2.00, respectively. Their outlook remains cautiously optimistic, focusing on the OneWeb merger's integration, debt reduction progress, and ongoing share price challenges.

Eutelsat's stock has seen a slight rise going into the holiday period. The company's next steps will depend on executing its African expansion, managing debt, and delivering on the OneWeb merger's promised benefits. Investors and analysts are tracking these developments as key indicators for 2024.