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Telesat sale edges closer

Canada’s Telesat satellite operator has been up for sale for some time, and majority owner Loral Space & Communications is reported to have selected private equity firm Apax Partners, as well as a pair of Canadian pension funds, to negotiate the sale of the business. Loral holds a 62.8 per cent economic interest in Telesat, but only 33.3 per cent of its voting stock.  Canada’s Public Sector Pension Investment Board (PSP) has a 33.3 per cent economic stake, but 66.7 per cent voting rights over Telesat.

Loral has selected Apax, the Canada Pension Plan Investment Board (CPPIB) and the Ontario Teachers’ Pension Plan, to start negotiations to try and bring PSP into the sale loop.

A sale of Telesat has been mooted for some time, but the asking price of $7 billion was seen as too high by some analysts.  Various other satellite operators have looked at Telesat’s assets, as have PE companies Carlyle Group, KKR and Onex Corp, although all these named businesses are reported to have withdrawn from the bidding.

One option rumoured within the industry is that Telesat could be broken up, with its fleet of satellites going to assorted bidders.

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