Eutelsat Shares: A Crucial Upgrade Amidst a Painful Restructuring

For investors in Eutelsat, the satellite operator's extensive restructuring has been a demanding trial. However, a significant development has emerged to provide some relief during this challenging period. In a move that caught the market's attention, the credit rating agency Moody's has issued an upgrade, prompting a critical question: does this signal a genuine turning point for the embattled shareholders, or merely a temporary respite?

The catalyst for Moody's revised assessment is fundamentally political, not operational. The agency has elevated Eutelsat's rating from "B2" to "Ba3", assigning a stable outlook. This positive shift is directly tied to the company's ongoing capital measures, which are set to transform the French state, via its investment arm Bpifrance, into the dominant anchor shareholder.

With nearly a 30 percent stake, Eutelsat now carries the status of a state-associated issuer. For creditors, this implicit government guarantee translates into one crucial advantage: a substantially reduced default risk. While the company's operational debt burden remains elevated for now, the immediate threat of insolvency appears to have been averted.

Shareholders Face a Dilution Dilemma

The upgrade in creditworthiness comes at a steep cost for existing investors. The second tranche of the capital increase is now fully underway, aiming to raise an additional 670 million euros. The terms, however, are severe for current shareholders. New shares are being offered at 1.35 euros—a deep discount that forces incumbent investors to participate or face significant dilution of their holdings.

Should investors sell immediately? Or is it worth buying Eutelsat?

Key details of the capital raise include:
* Subscription price: 1.35 euros (substantially below historical trading levels).
* Ratio: 8 new shares for every 11 old shares held.
* Final day of rights trading: December 5, 2025.
* Subscription deadline: December 9, 2025.

Strategic Moves by a Major Investor

In this complex environment, even a major investor like SoftBank is executing tactical maneuvers. Its sale of approximately 36 million subscription rights might initially appear as a retreat. Market analysts, however, interpret this as a financing strategy. The consensus view is that the conglomerate plans to use the proceeds to exercise its remaining rights without committing fresh capital.

The total 1.5 billion euros raised from this capital measure is vital for Eutelsat's future. These funds are earmarked primarily for debt reduction and financing the ongoing deployment of the OneWeb constellation, alongside the European IRIS² project.

The Moody's upgrade provides a foundational support to help stabilize the share price above the critical subscription threshold. Nevertheless, caution is warranted. Eutelsat remains a company in the midst of a profound transformation. Its long-term viability will ultimately depend on whether its new Low-Earth-Orbit (LEO) services can generate sufficient cash flow quickly enough to sustain the balance sheet through its own operational strength.