Satellite operator Telesat of Canada is reportedly being pushed to mount an IPO in order for one of its major shareholders to monetise its investment.
Telesat, the world’s fourth-largest satellite operator with 14 satellites in orbit, has variously been up for sale, and contemplating an IPO, over the past few years. However, CEO Dan Goldberg has yet to find a successful formula on either proposal.
Loral Space & Communications has admitted in an August 7th filing with the US Securities & Exchange Commission that it has been somewhat stymied in its wish to see Telesat mount an IPO. Loral says that its fellow major investor, Canada’s PSP Investments, a pension fund, has declined to agree to Loral’s latest IPO suggestion for a “combination transaction”. Loral, in its SEC filing says it is looking for another “strategic initiative” to alter the current status quo “in our ownership of Telesat”.
The Telesat ownership structure is somewhat complex in that Loral holds a 62.8 per cent economic interest in Telesat, but only a 32.7 per cent voting interest. PSP Investments holds the mirror stakes (32.7 per cent economic and 62.8 per cent voting).
Loral says it has already used rights within its shareholder agreement to require Telesat to conduct an IPO and release not more than 25 million shares in the float. However, even for this to happen the current shareholder agreement would need to be terminated.