Eutelsat quits Viasat joint venture
November 19, 2020
By Chris Forrester
Eutelsat is selling its majority share in its Euro-Broadband joint venture with Viasat.
Eutelsat is reorganising its Ka-band broadband-by-satellite strategy over Europe. It owned a 51 per cent stake in Euro-Broadband with Viasat of California holding 49 per cent. Eutelsat will receive an “initial consideration” of €140 million for its stake. This sum could be adjusted up – or down – depending on future trading revenues.
Eutelsat says the transaction completes the reorganisation and simplification of Eutelsat’s broadband distribution in Europe following the acquisition of Bigblu Broadband Europe, while moving towards an open technology and freeing up financial resources for investment in direct distribution.
The deal means the net impact of the combined operations of the acquisition of Bigblu Broadband Europe and the disposal of EBI is estimated at around -€20 million on Operating Vertical Revenues and -€30 million on Discretionary Free-Cash-Flow for the first full fiscal year following completion of the transactions, says Eutelsat.
Rodolphe Belmer, CEO at Eutelsat, said: “We are delighted to reach this agreement with Viasat over the future of EBI. It completes the reorganisation of our broadband distribution set-up for Europe following the wholesale agreement with Orange for France and the acquisition of Bigblu Broadband Europe covering other major markets. With the recent entry into service of Eutelsat Konnect, to be followed by the launch of Konnect VHTS, we are optimally placed to assure the rapid ramp-up of these new generation in-orbit assets in the coming years.”
Under the agreement, Eutelsat and its subsidiaries will continue to provide transitional services to EBI, including the operation of the ground network for KA SAT, while EBI will provide service continuity to the KA SAT subscriber base of Bigblu Broadband Europe acquired by Eutelsat in September 2020.
Eutelsat explained the stake will be sold for an initial consideration of €140 million, subject to a customary net working capital and net debt adjustments at the time of completion. Two years following completion, the consideration may be adjusted up or down by up to €20 million depending on the level of certain EBI revenues achieved over this period. The transaction will also result in the deconsolidation by Eutelsat of the cash held by EBI of €90 million at September 30th 2020.
Completion is expected in the first quarter of calendar year 2021, subject to customary conditions precedent.