PARIS, June 19 (Reuters) -

The French state will become Eutelsat's top

shareholder following a 1.35 billion-euro ($1.55 billion)

capital increase aimed at helping the satellite company better

compete with Elon Musk's Starlink, the finance ministry said on

Thursday.

The capital injection will deliver a shot in the arm to

debt-laden Eutelsat, which has garnered unprecedented attention

this year from European governments looking for alternatives to

compete with Elon Musk's Starlink.

France's state shareholding agency will inject 717 million

euros, or more than half of the sum, into the company, the

ministry said.

The agency will also acquire the stake held by France's

state-owned investment bank Bpifrance in Eutelsat as part of the

company, a government official said, bringing France's total

stake to 29.99%.

"The French government is proud to support Eutelsat. By

participating in its capital increase, we are supporting a

decisive stage in its development. Satellite connectivity is a

strategic issue for our industrial and digital sovereignty,"

Finance Minister Eric Lombard said.

($1 = 0.8721 euros)