Telesat sale hampered by dispute
June 13, 2011
Canadian satellite operator Telesat is up for sale. But there’s now a highly public dispute between two of its shareholders as to the sale price.
Canada’s Public Sector Investment Board holds a 36 per cent stake in Telesat but has the majority of directors because of complex local ownership rules. It is holding out for a US$6 billion-plus price.
Meanwhile, investor Mark Rachesky, who ultimately holds a 38 per cent stake in Loral Space & Communications, and with Loral holding a 64 per cent stake in Telesat, has a major voice in what happens at the Canadian company. Rachesky reportedly wants to sell now, and is happy to see a sub $6 billion price agreed. Other investors in Telesat – including Carlyle, Blackstone and KKR – are all said to be anxious about the high numbers being demanded by the Canadian pension fund and concerned that too high a debt load will impair future flexibility at Telesat.
The squabble could see no sale achieved, and instead see Telesat scrubbing sale plans and mounting an IPO.
Canadian business observers are not happy given that the Canadian government achieved just C$155 million when it sold Telesat less than 10 years ago. Telesat is now the world‘s fourth largest satellite operator.