A Public Company Formed by Telesat and Loral Space

On Tuesday, Loral Space & Communications, Telesat Canada, and Canadian’s Public Sector Pension Investment Board (PSP Investments) announced that Loral Space and Telesat Canadian would merge to form Telesat Corporation, a Canadian incorporated company. The company’s headquarters will be in Ottawa, and Dan Goldberg, Telesat CEO, will be the headquarters leader. The main purpose of the merger is to fund the Low-Earth Orbit (LEO) constellation. 

Goldberg said that the merging would enable Telesat to access public equity markets, giving it more flexibility to support investment opportunities such as Telesat LEO, which will help its customers have a competitive advantage for them to be successful. Telesat current and former management shareholders, PSP Investments, and Loral stockholders will own all the new Telesat’s equity in almost the same proportion after closing the deal. 

This transaction is awaiting approvals, and the deal is expected to be closed in the 2nd or 3rd quarter of 2021. Telesat’s shares will then be listed on the Nasdaq Global Select Market, and they are considering listing them on the Canadian Stock Exchange. On Tuesday, Michael Targoff, Loral Vice Chairman, said that it would take a lot of time until projected closing because of different regulatory approvals needed. He added that they believe the transaction would benefit their stockholders. Some of these benefits include Telesat’s ambition to access the public equity markets to get funds for its LEO constellation. This will also enable Telesat to reposition itself for future growth.

The transaction had long been projected since the discussion concerning the merge started in April with PSP Investments. Targoff said that the discussions are moving on well, and everything will be accomplished soon. Goldberg said that if Telesat will become public and issue equity as part of the transaction, then no doubt that the proceeds would be used to fund LEO. 

So far, Telesat has not said anything about the production and Telesat LEO launch. However, Goldberg said that the company is in the advanced stages of discussing it, and they will give a report by the end of the year. Telesat LEO, which comprises 298 satellites, will provide broadband internet. This is expected to serve Mobile Network Operators (MNOs), marine, aero, Internet Service Providers (ISPs), and government services. At the beginning of this month, Telesat reached an agreement with the government worth $462 million to provide internet to the ISPs and MNOs at a reduced cost to enable them to serve Canada’s indigenous communities and eligible rural households. 

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