Tampa, Fla.-SES is calling for less state control over a shareholder Luxembourg-based satellite operator with more than 7% economic interests of more than 7% economic interests, arguing that more freedom is required to deal with increasing challenges.
Hedge Fund Applosa said on 27 February that the operator’s rival is a $ 3.1 billion plan to buy Intelstat, where it holds a uniform stake, not enough to address the threat of a survival from a rapidly changing market.
Established by billionaire investor David Taper, Appaloosa also proposed Downering and refreshed the company’s board of directors, as well as a structured program to distribute capital to shareholders, including annual allocation of surplus funds.
The SES said that it is later evaluating proposals and plans to make recommendations for the shareholders. A spokesperson refused to comment further.
State freedom
The Government of Luxembourg has a special category of shares (Class B) that gives it 33.33% voting rights despite the company having only 16.67% economic interest.
Announcing its proposals, Appaloosa said in a news release, “Perhaps this inequality may be excited in the past when the satellite industry traded as a stand of quiz-government incumbents as an alligopoly, which is reflected in content competition.”
“In the current context, however, the structure is an ancient remains that dissatisfies shareholders and discourage investors and customers as a serious commercial venture as an authentic commercial venture.”
Appaloosa proposed to convert class B shares into class A, which will maintain the government’s 16.67% stake in SES.
The hedge funds said that the government can protect its major interests – keeping the headquarters of SES, maintaining the fair board representation and ensuring local operations – through the company’s bylaws or target changes in a contractual agreement.
“As a result of these measures, the government’s legitimate concerns may be addressed, but the company has the ability to influence the ability to influence business matters,” Applosa said.
“Finally, modernization of the company’s capital structure in line with international standards will contribute to the continuous feasibility of SES and for the benefit of both public shareholders and Grand Dachi of Luxembourg.”
Appaloosa’s proposals challenge the government’s role in SES when operator Luxembourg’s growing space remains a column of ambitions
The country also supports broad space initiatives, including its space resource initiative, aimed at developing a legal and commercial structure for asteroid mining and other commercial activities.
Industry challenges
With a growing competition from SpaceX’s Starlink Broadband Nakshatra, with shares below the covid-era, Apaloosa said that the SES would have to be moved to the government-affiliated model to a more agile, commercial approach.
While SES maintains a stable financial estimates, Moody stabilized the operator’s approach to 18 February. From negative to negative due to competitive pressure and uncertainty around future revenue.
A week later, SES recorded 2 billion euros ($ 2 billion) in revenue for 2024, which was 0.9% year-on-year, but at the top end of its financial approach.
Adjusted ebitda, or earnings before interest, taxes, depreciation and earnings, increased 0.9% to 1.03 billion euros.
Further, the SES estimates stable revenue and adjusts the Ebitda for 2025, expected to be closed in the second half of the year with intelligence acquisition.
