Will help bring in capital for LEO expansion
OTTAWA — Saying it will remain Canadian controlled and headquartered in Ottawa, Telesat Canada today announced it has entered into an agreement with Loral Space & Communications Inc. and Public Sector Pension Investment Board (PSP Investments) to combine with Loral in a new publicly traded Canadian company to be called Telesat Corporation.
New York-based Loral currently owns a 62.7% economic interest in Telesat Canada. The shares of the new Telesat company will be listed on the Nasdaq Global Select Market at the closing of the transaction, and Telesat is also considering a listing on a Canadian stock exchange.
The transaction is expected to close in the second or third quarter of 2021, subject to regulatory approvals, the approval of Loral’s stockholders (including a majority of Loral’s stockholders not affiliated with MHR Fund Management, PSP Investments or other transaction participants) and other customary conditions.
Telesat Corporation will be headquartered in Ottawa and led by Telesat Canada’s president and CEO, Dan Goldberg. Telesat’s voting and governance provisions will ensure the company is and remains Canadian controlled, said Telesat’s press release announcing the transaction.
“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 Goldberg, in the press release.
“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.”
The transaction allows public market investors, including Loral’s stockholders, to own Telesat directly. According to Loral’s press release, upon closing of the transaction, Loral’s stockholders, together with PSP Investments and certain current and former management shareholders of Telesat Canada, will beneficially own all of the equity in the new Telesat Corporation in approximately the same proportion as their current, indirect ownership of Telesat.
“The conclusion of this transaction represents an important milestone in our plan to deliver significant value to all Loral stockholders. Telesat is revolutionizing the provision of broadband internet connectivity worldwide by developing the most advanced constellation of low earth orbit (LEO) satellites and integrated terrestrial infrastructure ever conceived. The ownership structure of New Telesat will facilitate access to the capital markets for continued advancement of LEO, positioning New Telesat for substantial growth to further enhance shareholder value,” said Loral’s board chair, Dr. Mark Rachesky, in the Loral press release.
