Eutelsat replaces CEO with Orange executive in surprise move

By Mathieu Rosemain and Gianluca Lo Nostro

PARIS (Reuters) - Franco-British satellite operator Eutelsat will replace its CEO with Orange executive Jean-Francois Fallacher, it said on Monday, in a surprise move by a company in the spotlight for its role in European defence communications.

Fallacher, currently CEO of Orange France, will take over on June 1, at a time when Eutelsat has said it needs more financing. He will succeed Eva Berneke, who has led the company since 2022.

The Frenchman takes over as Europe is looking for home-grown commercial and defence satellite communication options to reduce its reliance on Elon Musk's Starlink.

Fallacher, 58, is a telecoms sector veteran, having led Orange's branches in Romania, Poland, Spain and France over the last 15 years.

"It is a continuity appointment, not a rupture with the strategy, as the path is clearly traced and the new CEO is committed to build," a Eutelsat spokesperson said.

Shares in the company, up 90% this year, rose 8% by 1148 GMT. Only 20.9% of the shares listed in Paris and London are publicly traded, making it prone to sharp price swings.

A COSTLY MERGER

Berneke led Eutelsat through its merger with Britain's OneWeb in 2023 and a rapid revival of interest in the role of satellite connectivity in Europe.

Eutelsat's OneWeb acquisition gave the group control over the only other constellation of low Earth orbit satellites in the world at the time besides Starlink.

Suggestions the company could replace Starlink in providing internet access to war-torn Ukraine fuelled the biggest weekly gains ever in Eutelsat stock in early March.

Berneke told Reuters last month the company has provided its high-speed satellite internet service to Ukraine for about a year via a German distributor.

"Eutelsat is set for a full alignment with a world where Europe is a strong sovereign space player and strongly aligned with the telecom connectivity ecosystem," Berneke wrote in a post on LinkedIn regarding her departure.

She added that the company was looking to "adjust our governance and shareholder structure", which had paved the way for the CEO change. She did not give further details.

A person familiar with the situation said Eutelsat was facing significant investment demands that would require fresh capital, with a potential share sale a logical avenue.

Eutelsat had said its OneWeb tie-up would lift the group's annual sales to $2 billion by 2027, with OneWeb's second generation of LEO satellites expected to be launched by the end of the decade.

However, Eutelsat now says it needs more than three times the satellites than previously thought, requiring up to 2.2 billion euros ($2.5 billion) in financing.

($1 = 0.8822 euros)

(Reporting by Mathias de Rozario and Gianluca Lo Nostro in Gdansk and Dominique Patton and Mathieu Rosemain in Paris. Editing by Louise Heavens and Mark Potter)