European satellite operator Eutelsat is set to raise more than $1.5 billion to fuel its Low Earth Orbit (LEO) ambitions, led by the French government.

The company this week announced a €1.35 billion ($1.55bn) contemplated capital raise, anchored by key shareholders, to “secure the execution of [its] long-term strategic vision.”

“This capital increase would represent a pivotal step in Eutelsat’s strategic and financing roadmap, enabling the execution of its strategic vision,” Eutelsat said. “Coupled with a dedicated debt refinancing plan, this capital increase will reinforce the Company’s financial flexibility by accelerating its deleveraging and support investment in its existing LEO capabilities and the future IRIS² constellation.”

Investors would include the French State via the Agence des Participations de l’Etat (APE) for €526.4m ($606m), Bharti Space Limited for €31.4m ($36.15m), CMA CGM for €100.4m ($115.6m), and Le Fonds Stratégique de Participations (FSP) for €57.8m ($66.55m).

Eutelsat also said APE will acquire the shares in the company currently held by Bpifrance Participations.

Following the two transactions, and subject to participation from investors, the French State would hold a stake of 29.99 percent of the capital and voting rights, while Bharti Space Limited, CMA CGM, and FSP would hold 18.70 percent, 7.81 percent, and 5.22 percent of the share capital and voting rights, respectively.

Jean-François Fallacher, CEO of Eutelsat Group, said: “Eutelsat enters a new chapter, centered on the deployment of LEO, a major innovative and technological revolution for the Satellite industry. Thanks to its differentiated GEO-LEO positioning and global coverage, Eutelsat is ready to become a central player in the development of the European sovereign space of tomorrow.”

He continued: “I welcome the contemplated capital increase, which will give Eutelsat the requisite financing to implement its strategic roadmap. I am grateful for the support of the French State and the ongoing commitment of our other anchor shareholders – Bharti, CMA CGM, and FSP and thank them for their confidence.”

Discussions are also ongoing with other interested parties, the company said, including the UK government via the Secretary of State for Science, Innovation and Technology, which could join the capital raise in due course. The UK currently owns around 10 percent of Eutelsat via its previous investment in OneWeb.

Eric Lombard, French Minister for the Economy, Finance and Industrial and Digital Sovereignty, added: “The French State is proud to contribute to strengthening Eutelsat’s capital structure and support the company at [a] pivotal stage of its development. This transaction reflects our strong commitment towards a major player in satellite connectivity — a strategic sector at the heart of Europe’s digital sovereignty — while fostering remarkable potential for technological innovation and sustainable economic growth.

Goldman Sachs Bank Europe SE, Ravel & Co., and Rothschild & Co. are acting for Eutelsat in connection with the transaction. Bredin Prat and Linklaters are acting as legal counsel to Eutelsat.

French Military taps OneWeb in €1 billion contract

This week also saw France’s Armed Forces Ministry tap Eutelsat for a 10-year, €1 billion ($1.15bn) contract to provide satellite services, primarily via OneWeb.

The deal, made under the French MoD’s NEXUS (Neo-Espace pour de multiples Usages Sécurisés) program to update its satellite communications capabilities.

In the announcement, Eutelsat noted that France had reaffirmed its commitment to the European IRIS² satellite program, but the “urgency of the international situation” meant that it could not wait until the constellation goes live later in the decade.

As well as capacity on Eutelsat’s OneWeb fleet, the agreement covers the “upgrading and securing of the constellation for military grade use.”