Telesat close to completing Lightspeed funding

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TAMPA, Fla. — Telesat is close to securing all the funds it needs for Lightspeed, after the Canadian government said it would inject more than a billion dollars into the low Earth orbit constellation.

The government plans to invest 1.44 billion Canadian dollars ($1.15 billion) in the project, which aims to start launching a network of nearly 300 broadband satellites next year.

In return, Telesat will invest in Canadian infrastructure to build out Lightspeed, including hundreds of jobs and scholarships.

It means Telesat has now made arrangements for about 4 billion Canadian dollars of funding for Lightspeed, more than two-thirds of its expected overall cost. Telesat has put a $5 billion price tag on Lightspeed, or 6.3 billion Canadian dollars.

The rest of the funding will primarily come from debt financing from export credit agencies.

Europe-based Thales Alenia Space is building the satellites. U.S.-based Blue Origin and Relativity Space have early agreements to launch them.

Telesat CEO Dan Goldberg said the company expects to secure the remaining financial commitments “in the near term” for Lightspeed.

“Now is the time to bolster Canada’s position as a global leader in the new space economy,” said François-Philippe Champagne, Canada’s minister of innovation, science and industry in an Aug. 12 statement. 

“Through its partnership with Telesat, our government is creating more high-skilled jobs, enabling innovation and helping to unlock economic and social opportunities in Canada’s most rural and remote communities. Every Canadian should have access to affordable high-speed Internet. Today, we took a big step towards making that happen.”

The government’s investment is split between a 20-year, 790 million Canadian dollar loan, and 650 million Canadian dollars in preferred equity. The financial package includes warrants that can be turned into shares later.

Telesat committed to investing 1 billion Canadian dollars of Lightspeed’s initial capital expenditures in Canada as part of the deal.

The operator said it would also employ at least 700 full-time-equivalent employees in Canada while supporting academic and scholarship initiatives, particularly those focusing on women in science, technology, engineering, and mathematics (STEM) programs.

Telesat also committed to spending 50% of the cost to deploy a second-generation Lightspeed constellation in Canada, or 2.6 billion Canadian dollars if that amount is lower, while giving the government incentives to make additional investments in it.

The financing comes less than a week after Telesat said it secured a five-year investment agreement from Ontario’s government, worth 109 million Canadian dollars.

The Canadian company also plans to list shares on the Nasdaq stock exchange this summer to support Lightspeed.