Telesat to Merge With Loral Space to Form Public Company

Telesat headquarters. Photo: Telesat.

Telesat Canada is combining with major shareholder Loral Space & Communications to form one public company to finance its Low-Earth Orbit (LEO) constellation. 

Telesat Canada and its co-owners Loral Space and Canada’s Public Sector Pension Investment Board (PSP Investments) announced Tuesday that Telesat Canada and Loral will become subsidiaries of Telesat Corporation, a new publicly traded Canadian incorporated and controlled company. The company will be headquartered in Ottawa and led by Telesat CEO Dan Goldberg.

“Following the closing of the transaction, Telesat will have access to the public equity markets, providing increased flexibility and optionality to support our promising investment opportunities, including Telesat LEO, which will bridge the digital divide both at home in Canada and around the world, and give our customers the competitive advantage they need to be successful,” Goldberg commented in the news release. 

The transaction is subject to approvals and is expected to close in the second or third quarter of 2021. The shares of Telesat will be listed on the Nasdaq Global Select Market, and Telesat is also considering a listing on a Canadian stock exchange. 

This development been previously discussed as a possibility. In April, Loral said it was in advanced discussions with PSP Investments about the combination. 

During Telesat’s Q3 earnings call last month, Goldberg discussed the option of financing Telesat LEO through an IPO. He expects Telesat LEO to require billions of dollars of CapEx, which he expects to be financed through one third equity, two-thirds debt. “If Telesat were to go public, and if Telesat were to issue equity as part of that process, certainly the proceeds of an offering could be used to invest in LEO,” Goldberg said at the time. 

Telesat has not yet announced manufacturing and launch vendors for Telesat LEO but Goldberg said in Q3 the company is in “very advanced” discussions and he expects to make some announcements by the end of the year.

Telesat LEO, a planned network of 298 satellites, will offer capacity for broadband internet. Telesat is targeting the project to serve backhaul needs for Mobile Network Operators (MNOs), telcos and Internet Service Providers (ISPs), along with aero, maritime and government services. 

Earlier this month, Telesat reached a $462 million (600 million Canadian dollars) agreement with the Canadian government to offer a dedicated pool of capacity that MNOs and ISPs can purchase at reduced rates to serve eligible rural households and Indigenous communities in Canada.

This story will be updated.