Telesat Canada and majority shareholder Loral Space & Communications have declared their intention to merge and form a new Canadian company, temporarily named New Telesat. The announcement, on 24 November, outlined the planned ownership of New Telesat and its publicly traded status. The company will be listed on the NASDAQ exchange, like its precursor Loral.
Details of this transaction have had to be negotiated between Telesat Canada, Loral, and another Telesat Canada shareholder PSP Investments (Canadian Public Sector Pension Fund) and MHR Fund Management (which along with associates, owns a majority of Loral shares). Under the current plans, ownership stakes in New Telesat will be as follows: PSP Investments 36.7 per cent, MHR Funds 36.6 per cent, other Loral shareholders 26.1 per cent and Telesat Canada management 0.7 per cent.
Telesat owns a 17-strong satellite fleet (16 GEO and one LEO unit) providing global satellite coverage. On 31 December 2019, Telesat reported a sales backlog worth approximately US$2.5 billion. Loral also owns 56 per cent of XTAR LLC, a joint venture between Loral and Hisdesat. XTAR owns and operates an X-band military communications satellite positioned at 29 degrees East.
Completion of this endeavour is planned for the second or third quarter of 2021. This date is, however, subject to approval from both Canadian and American authorities, alongside approval from Loral’s non-MHR Funds affiliated shareholders.
Comment by Matthew Wilson: A significant pull-factor in the decision for Telesat to go public in this way likely relates to capital raising opportunities – specifically, raising cash to spend on its long-heralded LEO constellation. In an earnings call in October, the company made announcements concerning the award of contracts to constellation manufacturers and launch providers by the end of 2020.
Followers of the space industry may be feeling a sense of déjà vu. There has been much anticipation concerning Telesat’s constellation plans for the past four years.