France has announced a €1.35 billion ($1.55 billion) investment in the debt-laden satellite company Eutelsat, becoming the company's largest shareholder. As the French finance ministry said, the move is intended to strengthen Europe’s leading satellite to compete with Elon Musk’s Starlink.

France chose to act now to avoid depending on "other powers" in the future, said President Emmanuel Macron and urged countries and companies as a matter of European sovereignty to invest in French satellite company Eutelsat.

"The race is on. That's why we have to take a position now and invest now. Otherwise, the whole market will be occupied and France and Europe will depend on other powers in future," Macron's office told AFP.

The 717 million-euro capital injection by the French state, which was part of an overall deal with other investors worth 1.35 billion euros, will make Paris Eutelsat's largest shareholder, raising its stake from 13 percent to just under 30 percent.

Eric Lombard, Minister for the Economy, Finance and Industrial and Digital Sovereignty, stated: “The French State is proud to contribute to strengthening Eutelsat’s capital structure and support the company at pivotal stage of its development. Through this transaction, France reaffirms its determination to build, together with the company and its European partners, a competitive, resilient, and sovereign space industry, particularly around the IRIS² program, which is a key pillar of our strategic autonomy."

With its role as the largest private investor in the European Union’s IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) program, the public-private partnership aiming to build a multi-orbit constellation delivering secure communication services to the EU and its Member States, Eutelsat confirms its status as a central player in assuring Europe’s space and connectivity sovereignty.

As the only European operator with active commercial LEO (Low Earth Orbit) fleets and fully operational LEO network, Eutelsat is positioned to play a strategic role in supporting critical sectors such as military communications, cyber-resilience, and secure government connectivity, fully aligned with European Union and NATO objectives for strategic autonomy.

Earlier this week the company signed the landmark 10-year framework agreement with France’s Ministry of the Armed Forces, aimed at strengthening the integration of civilian and military assets (Nexus program), for a maximum amount of €1 billion, illustrates the strategic role of the LEO constellation in France’s model for sovereign defence and space communications.

Meanwhile, Reuters reported that France and Britain are holding talks over the British government's possible participation in Eutelsat's rights issue.

An announcement could be made during Macron's scheduled state visit to the UK in early July, the source close to the matter added, speaking on condition of anonymity. Britain holds 10.9% of Eutelsat.

Other big Eutelsat shareholders, including Indian billionaire Sunil Mittal's Bharti Space, shipping company CMA CGM and Fonds Strategique de Participations, a long-term investment fund backed by French insurers, will subscribe to the capital increase, Eutelsat said on Thursday.

Copied