Telesat nearer financing satellite network after Canada investment (updated)

Telesat

12/08/2021 16:10

(Adds Telesat CEO comments, details)
    By Eva  Mathews and Steve Scherer
    OTTAWA, Aug 12 (Reuters) - Telesat took a major step toward
financing its low earth orbit (LEO) satellite constellation
aiming to provide high-speed broadband after Canada on Thursday
said it would invest C$1.44 billion ($1.2 billion) in the
project.
    Canada said it will loan Telesat, an Ottawa-based satellite
communications firm, C$790 million, while purchasing C$650
million in preferred stock in the LEO unit, called Telesat
Lightspeed. Canada will also receive warrants that can be
exchanged for common shares in Telesat. 
    "We have dramatically moved the ball forward with this and
expect to be fully financed in the near term," Telesat Chief
Executive Officer Dan Goldberg said in a telephone interview.
"We are nearly there."
    Telesat has said it needs $5 billion (C$6.3 billion) to
launch its satellite network. The latest investment means it has
about C$4 billion. That includes about C$1.7 billion of its own
cash and a C$400 million investment from Quebec.
    The remaining financing is under negotiation with the French
and Canadian export credit agencies, BPI and EDC respectively,
and Goldberg said he hopes to wrap those talks soon.
    The promised investment comes just three days before Liberal
Prime Minister Justin Trudeau is expected to seek an early
election https://www.reuters.com/world/americas/canada-pm-trudeau-is-planning-call-snap-election-sept-20-sources-2021-08-12.
 His government has promised to connect even remote Canadian
households to high-speed Internet by 2030.
    Telesat's 298 LEO satellites will operate 36 times closer to
earth than traditional ones, taking less time to send and
receive information and leading to fibre-optic speed broadband
even in Canada's isolated far north.
    "Every Canadian should have access to affordable high-speed
Internet," Innovation Minister Francois-Philippe Champagne said
in a statement. "Today, we took a big step towards making that
happen."
    Telesat is expected to become publicly traded on Nasdaq
sometime this summer, and could also list on the Toronto
exchange after that, Goldberg has said. Currently, Canada's
Public Sector Pension Investment Board and Loral Space &
Communications Inc  LORL.O  are the main shareholders. 
    Telesat is racing https://www.reuters.com/technology/canadas-telesat-takes-musk-bezos-space-race-provide-fast-broadband-2021-04-11
 against rivals including billionaire Tesla  TSLA.O  Chief
Executive Elon Musk, who is putting the so-called Starlink LEO
into orbit with his company SpaceX.
    Thales Alenia Space (TAS) has been tapped https://www.reuters.com/article/us-telesat-cnda-thales-satellite-idUSKBN2A91RL
 to build the satellites. TAS is a joint venture between Italy's
Leonardo  LDOF.MI  and France's Thales  TCFP.PA . 
    ($1 = 1.2509 Canadian dollars)

 (Reporting by Eva Mathews in Bengaluru and Steve Sherer in
Ottawa
Editing by Arun Koyyur and David Holmes)
 ((Eva.Mathews@thomsonreuters.com;))