Telesat merger, then IPO
November 26, 2020
More details have now emerged on the merger between Ottawa-based Telesat and satellite builder (and shareholder in Telesat) Loral Space & Communications.
Key to the long-expected merger solution is the role of Canada’s Public Sector Pension Investment Board (PSP). Under the merger agreement PSP, Loral and Telesat Canada will each become subsidiaries of ‘new’ Telesat Corp, which will continue to be headquartered in Ottawa, and headed by CEO Dan Goldberg.
The deal will close in 2021 subject to the usual regulatory and shareholder approvals whereupon Telesat Corp will seek a public listing in Q2-Q3/2021 on the Nasdaq exchange (where Loral is currently quoted) and probably on a Canadian stock exchange. Key to these moves will be a public offering.
The cash raised, according to Dan Goldberg, would then be used to fund its planned 298-satellite Low Earth Orbiting constellation.
“Following the closing of the transaction, Telesat will have access to the public equity markets, providing increased flexibility and optionality to support our promising investment opportunities, including Telesat LEO, which will bridge the digital divide both at home in Canada and around the world, and give our customers the competitive advantage they need to be successful. We look forward to engaging with our expanded shareholder base as we implement our growth plans with a focus on generating strong equity returns,” said Goldberg in his statement.
Telesat already has a significant backlog which includes a C$600 million contract from the Canadian government to acquire Telesat LEO capacity at substantially reduced rates to bring universal broadband connectivity to rural, Northern and Indigenous communities across Canada.