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Eutelsat suffers Fitch Ratings downgrade

November 24, 2023

By Chris Forrester

Eutelsat’s shares hit another all time low on November 23rd, not helped by a downgrade from Fitch. The ratings agency downgraded Eutelsat’s debt to ‘BB’ although stated that the operators outlook was “stable”.

However, the news didn’t help Eutelsat’s share price which crashed to €3.77 (from €4) although it finished the day at €3.81. The fall during the week was of 7 per cent (and 11 per cent over the past 30 days). Eutelsat’s market capitalisation, including OneWeb, is now just €1.9 billion.

Fitch stated: “The downgrade follows the completion of the company’s merger with OneWeb, a low-earth-orbit (LEO) satellite constellation operator. The lower rating reflects Eutelsat’s significantly increased execution and free cash flow (FCF) risks with reduced revenue visibility at OneWeb while its key profitable segments remain under pressure. This leads to lower deleveraging flexibility while EBITDA net leverage has increased to close to 4x.”

“Demand for LEO (and in combination with geostationary equatorial orbit (GEO) B2B services, Eutelsat’s targeted market niche, remains largely untested and competition may be intense,” added Fitch Ratings.

Eutelsat held its AGM on November 23rd where all motions in front of the board were passed.

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