Telesat goes public

Last week, Telesat emerged as a public company and started trading on the NASDAQ and Toronto Stock Exchanges. Under the arrangement, Telesat Canada and Loral Space & Communications are now subsidiaries of the Canadian controlled and incorporated public holding company.

“Today’s announcement marks a major milestone for Telesat, driving forward our plans for growth, innovation and increased value for our customers, partners, employees and shareholders,” said Telesat President and CEO Dan Goldberg. “By rationalizing our corporate structure and providing access to the public equity markets, this dual-listing enhances Telesat’s ability to execute on its compelling investment opportunities to drive our growth—and the future of global broadband connectivity—including our transformative Telesat Lightspeed Low Earth Orbit satellite network.”

Each share of Loral common stock has been converted into the right to receive either one share of Telesat Corporation or one unit of Telesat Partnership. PSP Investments and other shareholders of Telesat Canada have also exchanged their shares or equity awards into shares or equity awards of Telesat Corporation or units of Telesat Partnership.

In total, Telesat Corporation and Telesat Partnership are expected to have nearly 49.5 million shares and units outstanding, of which a total of almost 12 million will be Class A common shares and Class B variable voting shares of Telesat Corporation will be outstanding initially. The Class A common shares and Class B variable voting shares of Telesat Corporation are listed for trading on NASDAQ and TSX, under the stock symbol TSAT. A third of Class C shares for Telesat Corporation and units of Telesat Partnership can be converted into Class A common shares and Class B variable voting shares of Telesat Corporation.

As befitting of the company’s origin, Telesat’s Board of Directors will have a majority of Canadian directors. Once the smoke clears, affiliated funds of MHR Fund Management LLC will hold securities representing approximately 36% of Telesat’s outstanding equity, and PSP Investments will have approximately 37% of Telesat’s outstanding equity on a combined basis.

Telesat’s transition to a public company provides it another way to raise funding for its $5 billion Lightspeed LEO broadband network if and when it needs to by making an additional stock offering. A large chunk of Lightspeed is being funded through a combination of local and national government funding and Telesat cash flow.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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