Quebec signs preliminary deal to invest C$400 mln in Telesat satellite network (updated)

Telesat

18/02/2021 22:19

(Adds space technology company MDA close to deal with Thales
Alenia Space, quotes)
    By Steve Scherer and Allison Lampert
    MONTREAL, Feb 18 (Reuters) - Quebec's provincial government
has signed a preliminary agreement to invest C$400 million ($315
million) in Telesat's low earth orbit (LEO) telecommunications
satellite network, the parties said on Thursday.
    Telesat is owned by Pension Investment Board and Loral Space
& Communications Inc  LORL.O , but it plans to merge Telesat
Canada with Loral to become a public entity on the Nasdaq this
summer.
    Under a memorandum of understanding, Quebec's investment
"will consist of C$200 million in preferred equity as well as a
C$200 million loan," the parties said in a statement.
    The deal is expected to be finalized "in coming months,"
they added.
    "It's a good opportunity to diversify in satellites," Quebec
Premier Francois Legault told reporters at a press conference.
    Earlier this month, Telesat tapped Thales Alenia Space
 TCFP.PA  to build some 300 satellites in a contract worth $3
billion.  urn:newsml:reuters.com:*:nL1N2KF1J2
    On Thursday, Telesat said Canada's space technology company
MDA would manufacture phased array antennas for those
satellites, but did not give a value for the contract. 
    While the first satellites are to be built in France, MDA
Chief Executive Mike Greenley said the company is "very close"
to a deal with Thales Alenia Space to take on final assembly and
manufacturing in Quebec, Canada's aerospace hub.
    Legault said the province is now studying other possible
investments in the satellite business as the COVID-19 pandemic
weighs on the aviation sector. 
    The so-called Lightspeed network will base its operations at
a "new campus" in Gatineau, Quebec, Telesat President and Chief
Executive Dan Goldberg said in an interview. 
    "Kudos to the government of Quebec for identifying this as a
promising sector," Goldberg said.
    Telesat plans C$1.6 billion in total investments in Quebec
that, together with MDA, would create 600 high-skilled jobs, the
company said.
    Canada's federal government has already put up C$600 million
in a partnership with Telesat to provide broadband in remote
areas.

($1 = 1.2698 Canadian dollars)

 (Reporting by Steve Scherer in Ottawa and Allison Lampert in
Montreal; Editing by Richard Chang and Grant McCool)
 ((steve.scherer@thomsonreuters.com; +1-647-480-7889;))