Telesat for sale? Eutelsat or SES to bid?

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This isn’t the first time that Canada-based Telesat, the fourth-largest global satellite operator, has been reported to be up for sale. But this time the long-awaited sale could be a reality.

According to press reports, Loral is trying to sell its 62.7 per cent stake in Telesat, which is based in Ottawa. The reason is that Loral disagrees with its minority shareholder, a Canadian pension fund PSP.

The Public Sector Pension Investment Board (PSP) looks after the pensions of public civil servants, the Canadian armed forces, the Royal Canadian Mounted Police and others and has almost C$140 billion (€87bn) of assets under management, including a 38 per cent stake in Telesat.

Trade newspaper Space News reported last week that there could be a legal battle between the shareholders, and this is not helped by a complicated ownership structure, where Loral, despite its 62.7 per cent shareholding has just 32.7 voting rights over Telesat. PSP has the majority voting rights.

The two shareholders have argued – not always politely – for years over the strategic direction that Telesat should be taking. A recent Securities & Exchange Commission filing by Loral stated: “Depending upon the outcome of the strategic initiatives that we are pursuing we may assert certain claims against PSP for actions we believe violated our rights relating to the affairs of Telesat.”

In a note to investor clients early on March 19th, investment bankers Exane/BNPP stated that Loral and the PSP seem to have “buried the hatchet” for the moment while strategic discussions take place.

The bank speculates on Eutelsat taking an investment in Telesat, but cautions “While Telesat could offer some capex and orbital synergies as well as help Eutelsat increase its presence in North Amercia we doubt that the French operator is likely to pull the trigger on this asset. SES [has a] strategic focus on MEO satellites and its diversified geographic presence make it an unlikely buyer.”


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