Eutelsat talks Hispasat strategy
September 11, 2014
By Chris Forrester
“Eutelsat has been a shareholder in Hispasat since 2001 and at that time was encouraged by the Spanish government that one day Eutelsat would be authorised to become the controlling shareholder,” said Michel de Rosen, CEO of Paris-based satellite operator Eutelsat. “However, patience was also advised. Then the Spanish government changed, along with a new chairwoman at Hispasat while at much the same time Spain’s Abertis became the largest shareholder in Eutelsat. Later Abertis also became the largest shareholder in Hispasat.”
“For these reasons it became more difficult to implement our initial vision. Spain thought that the ‘nationality’ of Hispasat should remain Spanish, and Abertis had their own ambitions to expand their interest in satellites.”
“The third step came about with Abertis’ decision to exit Eutelsat, and this was completed a few months ago when they sold their remaining 5 per cent. Telefonica also exited their holdings in Hispasat, selling portions to us and Abertis. Spain also had a decision to make as to what to do with their own stake in Hispasat. Do they keep it, or do they allow one of the remaining major entities to become the controlling shareholder? We respectfully expressed our interest in becoming that controlling shareholder, but also said that that we would not be surprised if Spain chose Abertis as their preferred option. Indeed, that was Spain’s decision and Abertis did buy some of the Spanish state’s shares, and they are now the controlling shareholder with us at Number 2 with 34 per cent. The Spanish state holds 9 per cent.”
“We are an active and collaborative shareholder in Hispasat and want it to succeed and develop. Very occasionally there are inevitable conflicts which we, and Hispasat’s Board, resolve amicable and sensibly.”
“At the end of July I spoke about how this marathon in Hispasat had started way back in 2001 and we believe it is possible – although not certain – that one day Abertis decides to exit, and if this happens as a satellite operator with a 34 per cent stake, and knowing the company well, we would then be a natural, possible, lead shareholder. What makes this easier is that we have a pre-emption right on the shares if, one day, any of the two other shareholders decide to sell.”
We also have in place a ‘Put’ position where, if we decide that we need the cash, or that things are not working out with Hispasat, the ‘Put’ allows us to exit in a relatively smooth fashion.
Asked how the inevitable Latino competition between Hispasat and Eutelsat Americas (the new name for SatMex) was being handled and whether this was creating headaches, De Rosen insisted the answer was ‘no’. “We are all mindful of the obvious challenges, and we do not share commercial confidences with them, but with us both in the same business, and the same geography, there must be the odd conflict. Indeed, this allows us to have more chances to touch one another. In some cases this means opportunities, in others potential conflicts which we know must be managed carefully.