Telesat ponders IPO again

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Telesat of Canada is reportedly again trying to persuade its shareholders to agree to mounting an IPO.  This is by no means the first time that a potential IPO has been talked about but other attempts have failed to secure the mutual agreement of Telesat’s two major investors.

A November 9th SEC filing saw shareholder Loral Space & Communications say that it wanted to exercise its rights to “force” an IPO which would see a minimum of 25 million new shares issued. However, its fellow shareholder is Canadian pension fund PSP Investments, and Loral admits that it would need a modified shareholder agreement to be struck in order to proceed.

Telesat’s ownership is complex. Loral holds a 62.8 per cent economic stake in Telesat but only 32.7 per cent of the Voting Rights.  In a ‘mirror’ corporate structure, PSP holds the majority Voting Rights, but the minority economic interest.

The November 9th SEC statement from Loral added: “If we are unable to reach agreement with PSP on these matters, the advice of the lead underwriter selected for the Telesat IPO will be sought to assist resolution.”


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