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French to sell Eutelsat stake?

Reports in the French press suggest that the upcoming presidential elections will see the French State boost broadband infrastructure, and one way of funding the investment is by selling down its holdings in many French businesses.

Equity investment analysts at Exane/BNP-Paribas says the agenda of the main reformist candidates Emmanuel Macron proposes to partly finance a €10 billion fund dedicated to innovation and industry by selling public stakes in French companies. François Fillon plans to accelerate the sale of the State’s holdings in different companies, keeping only those he deems “strategic”.

“Marine Le Pen has announced she would like a mix of nationalisation and divestments. Benoît Hamon and Jean-Luc Mélenchon would rather increase the size of public stakes in French companies, although, based on current polls, they are less likely to be elected,” adds the bank.

The French State, via BPiFrance (Banque Publique d’Investissement), has a 26 per cent stake in Eutelsat. The bank says it does not see a sale of the Eutelsat stake happening. “First, we believe Eutelsat can be considered as a strategic asset. Both Macron and Fillon have pledged to prioritise high-speed broadband infrastructure investments to help bridge the digital divide. Satellite technology plays a key role in broadband connectivity in areas where the economics of terrestrial networks are prohibitive. Reinforcing military technology has been given as another key priority (Fillon). Satellite based technologies such as drones are likely to feature high on this agenda.”

“Second, selling the stake would loosen the French government’s influence over an asset with global reach, in which China Investment Corp owns a further 7 per cent and which has a historical commercial relationship with the Russian state,” adds the bank’s note to investors.

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