South Korea’s Hanwha offloads Eutelsat stake as Starlink rival seeks new investors.
South Korea’s Hanwha Systems said on Thursday it was selling its entire 5.4% stake in Eutelsat for about 78 million euros ($85 million), as the Franco-British satellite operator seeks new investors.
Eutelsat has garnered unprecedented attention this year from governments looking for home-grown alternatives to SpaceX’s Starlink for satellite internet connectivity.
The company is working on a new financing plan to fund the second generation of its low Earth orbit (LEO) OneWeb satellites and to fulfil commitments to the European Union’s IRIS² project.
It has piled up hundreds of millions of euros in losses, particularly from its waning video business, while its 2023 acquisition of OneWeb has yet to yield the results it had hoped for due to competition and delayed deployment of technology.
Finance chief Christophe Caudrelier said in May that Eutelsat was looking for capital investors.
Hanwha’s shares were offered at 3.00 euros ($3.42) apiece, representing a 13.9% discount to Eutelsat’s closing price of 3.48 euros on Wednesday, a term sheet from bookrunner Citi showed.
It also marks a steep 74% loss on Hanwha’s initial $300 million investment made in OneWeb in 2021, with the stake now valued at just $85 million.
The South Korean company said the sale, which is set to be concluded on Thursday, was not driven by an investment perspective but by a strategic shift to focus more on its core business operations.
Source: Globalbankingandfinance