The past week has seen Paris-based satellite operator Eutelsat raise some €1.5 billion overall in fresh money to improve its reserves and to finance investment in the proposed IRIS2 mega-constellation.

But while majority shareholders have supported the cash raising exercises, the Rights Issue, raising €670 million, has seemingly upset minority shareholders. Eutelsat’s share price has consequently plummeted in value. While some of this is due to a ‘technical plunge’ the rest of the fall reflects shareholder sentiment.

Over the two-day period since the Rights Issue was announced on November 25th, Eutelsat shares have crashed 39 per cent, and taken its official Market Capitalisation to €1.01 billion. Value at one point on November 27th was just €2.10 per share. Five days prior, they were trading at €3.25.

Dilution of current shareholders holding has generated the logical response from the equity market. Eutelsat’s shares crashed 12 per cent within the first hour following the announcement.

Existing shareholders will receive eight new shares for the 11 shares they currently hold. There is no dividend paid by Eutelsat to shareholders.

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Categories: Blogs, Business, Inside Satellite, Satellite

Tags: eutelsat, funding