Bharti Space to invest additional ₹1,200 crore in Eutelsat
This investment by Bharti Enterprises' space venture is in addition to ₹ 300 crore or €30 million, which it had committed earlier through a reserve capital increase process. Bharti Space holds a 24.09% stake in Eutelsat Group.
On 19 June, Eutelsat announced that it is raising capital of €1.35 billion (around ₹ 11,250 crore)through a mix of a reserve capital increase worth €716 million ( ₹ 6,865 crore) and a rights issue of €634 million ( ₹ 6,330 crore).
In the Thursday update, it increased the capital raising round size to €1.5 billion (over ₹ 15,000 crore) after the UK government committed to joining the fundraising round. The round now includes €828 million (around ₹ 8,304 crore) through reserve capital increase and a rights issue of €672 million (around ₹ 6,739 crore).
Eutelsat expects the fundraising to be completed by the end of this year.
To be sure, the UK government holds a 10.9% stake in Eutelsat currently. It has committed to invest a total of €163.3 million (around ₹ 1,638 crore).
The satellite operator aims to use the fresh funds to pare debt and expand investments in satellite constellations, as it pushes to cement its role in the global space communications market, it said in the 19 June statement.
'Today, governments require secure and reliable sovereign connectivity solutions, and Eutelsat is uniquely positioned to meet this need. Eutelsat's OneWeb was the first complete low-earth orbit constellation, and the company is the first and only provider able to provide customers with access to both low-earth orbit and geostationary orbit services,' said Sunil Bharti Mittal, co-chairman of Eutelsat Group, in the Thursday statement.
'This new capital injection will allow Eutelsat to go further and faster in developing innovative new technologies and services under the leadership of its new chief executive, Jean-François Fallacher,' Mittal added.
Bharti Space, along with other key investors—the French government, UK government, shipping major CMA CGM, and sovereign investor Fonds Stratégique de Participations (FSP)—will participate in both parts of the fundraising.
Eutelsat said the commitments of the reserved capital increase by investors remain subject to shareholders' approvals at an extraordinary shareholders' meeting, which will be held around the end of the September quarter. The same is also subject to other statutory approvals.
With the investment commitment of a total of ₹ 1,500 crore, Bharti's shareholding in Eutelsat Group would be around 17.8%. The French government will become the largest shareholder with a 29.65% stake as it is investing €750 million (around ₹ 7,518 crore).
In the merged entity of Eutelsat OneWeb, Bharti owns a 21% stake.
Bharti's shareholding in the company will reduce as, post the fundraising via reserve capital increase and rights issue, Eutelsat's overall share capital will increase. This would lead to potential dilution.
Eutelsat's reserved capital increase is being carried out at €4 per share, representing a 32% premium over the company's 30-day average share price on the Euronext Paris stock exchange as of 18 June's close.
'In the current environment, it is crucial that our countries continue to collaborate and support each other, including in space, which has become a key sovereign strategic asset. We remain committed to the UK, which we consider as one of our home markets, and to supporting the development of OneWeb to address the needs of all our sovereign and commercial stakeholders,' said Jean-François Fallacher, CEO of Eutelsat.
The capital raise comes at a time of heightened activity in the satellite internet space, especially in India. OneWeb, now part of the Eutelsat Group, has received a licence from the Indian government to launch satellite internet services. However, the roll-out remains on hold as the department of telecommunications is yet to allocate spectrum for such services.
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