PARIS (Reuters) -Eutelsat shares were up 6% at opening on Friday after the French government announced it would become the satellite company’s biggest shareholder following a 1.35 billion-euro ($1.55 billion) capital increase.
The French finance ministry said the move would help the company, which owns the world’s second-largest constellation of low-Earth orbit satellites, compete with Elon Musk‘s Starlink.
“By strengthening the capital of Eutelsat, the only European player in low-Earth orbit constellations, France is securing its strategic independence and paving the way for that of Europe,” French President Emmanuel Macron wrote in a post on X early on Friday.
Other major Eutelsat shareholders will subscribe to the capital increase, Eutelsat said in a statement, but it was unclear if Britain, which holds 10.9% of the company, will inject new money into it.
Eutelsat merged with OneWeb in 2023, saying at the time that the tie-up would lift the group’s annual sales to $2 billion by 2027, with OneWeb’s second generation of LEO satellites to be launched by the decade’s end.
But Eutelsat has since said it needed more than three times the number of satellites previously thought, requiring up to 2.2 billion euros in financing.
($1 = 0.8686 euros)
(Reporting by Makini Brice; Editing by Benoit Van Overstraeten and Joe Bavier)