Telesat to become a public company next week amid Lightspeed delay
TAMPA, Fla. — Canadian satellite operator Telesat expects to start publicly trading shares next week, broadening potential funding sources for its delayed $5 billion low Earth orbit Lightspeed broadband network.
Telesat expects to finish its merger with Loral Space & Communications, a major shareholder that already trades on the Nasdaq, Nov. 19 following a two-day closing process.
The company will list on the U.S.-based stock exchange if the merger goes ahead as planned. It is still awaiting confirmation from The Toronto Stock Exchange (TSX) to trade shares in Canada.
Although Telesat is not raising funds through the process, being “publicly listed will give us access to the public equity markets for growth initiatives, including Telesat Lightspeed,” a Telesat official said.
The company has already received commitments for about two-thirds of Telesat Lightspeed’s projected $5 billion cost, including about $1.15 billion from Canada’s government.
Talks with export credit agencies are still ongoing about securing debt to finance the rest of the constellation of nearly 300 broadband satellites.
“We expect to complete the Telesat Lightspeed financing with the Export Credit Agencies in the near term,” the Telesat official said in an email.
Diversifying funding sources is becoming increasingly important for the operator as pandemic-related component shortages cause delays at Europe’s Thales Alenia Space (TAS), which is prime manufacturer for Lightspeed under a $3 billion contract.
Dan Goldberg, Telesat’s CEO, said during the company’s quarterly financial results call Nov. 5 that TAS “recently informed us that the global supply chain issues out there will delay the construction of the Lightspeed satellites, which in turn will delay our getting into commercial service.
“We’re working with Thales now to get a better sense of the magnitude of the delay, whether there are steps we can take to mitigate the delays, and whether there are any further optimization we should consider for the Lightspeed design if we have a little more time.”
He added that the delay with TAS is also holding back “our ability to complete our financing arrangements with the export credit agencies.”
Deployment delays also increase the risk of Telesat missing regulatory deadlines for operating Lightspeed.
A Telesat official said the company does not anticipate any issues with the operator’s ITU filings, however, it will need to seek an extension to meet commitments made with the Federal Communications Commission.
“In regards to the FCC, Telesat does not expect to deploy 50% of its currently-authorized satellites prior to the FCC’s 50% deadline of November 3, 2023,” the official told SpaceNews.
“However, we can seek a waiver under precedents in which the FCC has extended milestones based on factors such as substantial expenditures and concrete progress toward completion of satellite construction.”
Telesat posted a 2% fall in total revenues to 192 million Canadian dollars ($154 million) for the three months to Sep. 30, compared with the corresponding period in 2020.
Adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, fell 1% to 157 million Canadian dollars for the quarter.