This is to help compete with Elon Musk. The government has become the largest shareholder

As Reuters reports, heavily indebted Eutelsat has attracted unusual interest from European governments this year as U.S. policies under President Donald Trump have prompted them to seek alternatives to American satellite providers.

Eutelsat shares skyrocket after French government's decision announced

The stock was up 9% this morning, after a 14.5% gain on Thursday after the French military signed a deal. It is up 38% since the beginning of the year.

- By strengthening the capital of Eutelsat, the only European player in low-Earth orbit constellations, France is securing its strategic independence and paving the way for Europe, French President Emmanuel Macron wrote in a post on X on Friday.

Investment bank JP Morgan said Eutelsat expects its debt level to fall to about three times annual earnings after the capital raise, down from four times today and a forecast five times by mid-2026.

"We find it difficult to see this rights issue as sufficient to support what we would consider a truly competitive LEO strategy," JP Morgan said.

Eutelsat has ten times fewer low-orbit satellites than Starlink

Eutelsat merged with British company OneWeb in 2023 and has about 650 low-orbit satellites . Compared to Starlink - whose network includes 6,700 active satellites, Eutelsat is a much smaller company, but in recent months its value has increased significantly after the European Union began talking about the possibility of transferring its own satellite communications systems to Ukraine.

Eutelsat merged with OneWeb in 2023, saying at the time the combination would raise the group’s annual sales to $2 billion by 2027, with OneWeb’s second generation of LEO satellites set to be launched by the end of the decade.

However, Eutelsat has since said it needs more than three times as many satellites as previously estimated, requiring funding of up to €2.2 billion.