South Korea’s Hanwha Systems announced on Thursday that it is selling its full 5.4% stake in the Franco-British satellite operator Eutelsat for approximately 78 million euros ($85 million). This move comes as Eutelsat seeks new investors to support its future growth plans.
Eutelsat has attracted significant government interest this year as countries look for domestic alternatives to SpaceX’s Starlink for satellite internet services. The company is preparing a new financing plan to fund the second generation of its low Earth orbit (LEO) OneWeb satellites and to meet commitments to the European Union’s IRIS² project.
However, Eutelsat has faced financial challenges, including hundreds of millions of euros in losses, mainly due to a declining video business. Its 2023 acquisition of OneWeb has yet to deliver expected results because of strong competition and delays in technology deployment.
In May, Eutelsat’s Chief Financial Officer, Christophe Caudrelier, confirmed the company was actively seeking capital investors.
Hanwha is selling its shares at 3.00 euros ($3.42) each, a 13.9% discount from Eutelsat’s closing price of 3.48 euros on Wednesday, according to a term sheet from Citi, the bookrunner. This sale represents a steep 74% loss compared to Hanwha’s initial $300 million investment in OneWeb in 2021, with the stake now valued at just $85 million.
Hanwha explained that the sale is part of a strategic decision to focus on its core business areas. “This decision reflects a long-term strategy to concentrate on defense-related satellites and military communications, rather than on civilian satellite operations and services,” the company said in a statement.
In April, a Hanwha representative resigned from Eutelsat’s board, signaling the company’s reduced involvement with the satellite operator.
Eutelsat told Reuters that no other shareholders have shown interest in selling their shares. The company declined to comment on reports that France might increase its stake in the group.
The satellite operator is also restructuring its leadership. Last month, it unexpectedly appointed Jean-François Fallacher as its new CEO. The company is also searching for a new chairperson after the current chair announced his departure in February.
Eutelsat’s shares, listed in Paris, dropped as much as 16.8% in early trading on Thursday.
Hanwha had become a shareholder in OneWeb before its merger with Eutelsat. It also acts as one of OneWeb’s distributors in South Korea, following a 2023 agreement to provide LEO satellite communications for the government and improve internet access in underserved regions.
Last week, South Korea’s Science Ministry granted licenses to both Starlink and Eutelsat OneWeb to operate in the country, with services expected to launch soon.
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