European
Commission Gives Approval to EUTELSAT Privatization Plan
The European
Commission has approved the restructuring proposals which will
transfer EUTELSAT (European Telecommunication Satellite
Organization) assets to a privatized entity. EUTELSAT is currently
an intergovernmental treaty organization. The restructuring will
transform the operating parts of EUTELSAT into a company  incorporated
in France. All of EUTELSAT’s assets and operational activities
will be transferred on July 2, 2001 into a national law company
headquartered in Paris, France. Eutelsat has informed the European
Commission that it will carry out a public offering (IPO) of 30% of
the shares within two years of the privatization (i.e. by July
2003).
EUTELSAT
has 48 member countries (parties). Each country has a signatory
(normally the incumbent national telecom provider) which owns a
share of the organization proportional to its usage of the Eutelsat
system. The signatories also act as distributors of Eutelsat
services to users or to sub-distributors. Following the
restructuring, the signatories will become shareholders in the new
company. The IPO will dilute the shareholdings of the signatories
and will reduce the possible conflict of interest between their role
as shareholders and as distributors of Eutelsat’s services
respectively. It will also permit the direct distribution of
services by Eutelsat rather than requiring customers to approach
Eutelsat’s current distributors (primarily their Signatories).
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