Telesat going public

After months of speculation, Telesat has reached agreement with its primary shareholders Loral and the Public Sector Pension Investment Board (PSP Investments) to go public. Going public gives Telesat access to the capital necessary for building its long-planned LEO broadband constellation.

The company will remain Canadian-controlled and become a publicly listed company on the Nasdaq exchange.  Under the agreement, Loral and Telesat will be subsidiaries of Telesat Corporation, a new publicly traded Canadian incorporated and controlled company. Loral is currently listed on Nasdaq and there’s consideration to list on a Canadian stock exchange when they finish the transaction in 2021. 

“Today’s announcement rationalizes our corporate structure and is another important step in our efforts to execute our exciting growth strategy, deliver the most competitive and innovative services to our customers, and create value for our shareholders and other key stakeholders,” said Dan Goldberg, Telesat’s President and CEO. “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.”

Telesat’s press release emphasizes the company will be headquartered in Ottawa and remain Canadian-controlled, a key need for PSP Investments and its role in managing the pensions of government workers. The transaction is expected to close in the second or third quarter of 2021, subject to regulatory approvals, the approval of Loral’s stockholders and the other usual approvals when changing a corporate structure.

At Telesat’s last financial call, officials indicated going public was a likely option to raise capital for building its LEO network, a project estimated to cost anywhere between $3 billion to $4 billion. The satellite company already has a considerable amount of cash, healthy cash flow, and a substantial multi-year financial commitment from the Canadian government for its LEO network. Going public provides it with the means to complete its satellite constellation with minimal financial risk.

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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