- Telesat (TSX:TSAT) has completed government funding agreements for its ambitious Telesat Lightspeed Low Earth Orbit broadband satellite constellation
- The global satellite operator successfully closed its agreements with the governments of Canada (C$2.14 billion) and Québec ($400 million) to ensure all necessary financing is in place to fully fund the global Telesat Lightspeed network
- This network includes satellites, launch vehicles, an integrated terrestrial network of landing stations, and business and operational support systems
- Telesat Corp. stock closed at C$16.42 per share
Telesat (TSX:TSAT) has completed government funding agreements for its ambitious Telesat Lightspeed Low Earth Orbit (LEO) broadband satellite constellation.
The global satellite operator successfully closed its agreements with the governments of Canada and Québec to ensure all necessary financing is in place to fully fund the global Telesat Lightspeed network. This network includes satellites, launch vehicles, an integrated terrestrial network of landing stations, and business and operational support systems.
Government of Canada loan details:
- Amount: C$2.14 billion
- Interest rate: Floating, 4.75 per cent above the Canadian Overnight Repo Rate Average (CORRA)
- Maturity: 15 years
- Interest payment: Payable in-kind during construction, followed by a 10-year sculpted amortization
- Warrants: 10 per cent of Telesat LEO common shares, based on a US$3 billion equity valuation
Government of Québec loan details:
- Amount: C$400 million
- Terms: Similar to the Government of Canada loan
- Warrants: 1.87 per cent of Telesat LEO common shares
The borrower under each loan is Telesat LEO Inc., a subsidiary of Telesat.
“Designed, manufactured, and operated in Canada – the Telesat Lightspeed satellite network will be the largest in Canadian history – creating thousands of jobs, growing our economy, and getting high-speed internet to Canadians,” Prime Minister Justin Trudeau said in a news release.
Bridging the digital divide
The Telesat Lightspeed network aims to bridge the digital divide by providing affordable, high-speed broadband connectivity to unserved and underserved communities in Canada and globally. This network will also support the modernization of satellite communications technology for governments, including contributions to NATO and NORAD modernization efforts, enhancing defence capabilities for Canada and its allies.
Workforce and future plans
Telesat has increased its Canadian workforce by approximately 33 per cent over the past year and anticipates capital expenditures for the program to range between C$1 billion and C$1.4 billion in 2024. The first Telesat Lightspeed satellites are scheduled for launch in mid-2026. Since announcing MDA Space (TSX:MDA) as its prime satellite manufacturer in August 2023, MDA has onboarded more than 90 per cent of the suppliers for the program.
MDA also announced this week that it was awarded a contract to provide antenna systems for three satellites for geostationary orbit.
Investor outlook
With all financing secured, Telesat is ready to blast off its Telesat Lightspeed project, promising significant growth and innovation in the satellite communications sector. This could mean big things to come for the company’s continued progress among the stars and contributions to global connectivity and defence modernization.
About Telesat and the Lightspeed network
Telesat’s Lightspeed network will be composed of 198 low-Earth orbit global broadband satellites tailored to enterprise needs, including gigabits-per-second speeds, dynamic bandwidth allocation, and responsiveness in line with fibre networks while being more cost-effective.
Lightspeed will be the first satellite network in the world to meet the requirements of telecom, government, maritime and aeronautical customers.
Telesat is one of the world’s largest satellite operators. The company boasts a more than 50-year history of resolving complex communications challenges that improve operations and drive profitable growth.
Telesat Corp. stock (TSX:TSAT) closed 15.39 per cent higher at C$16.42 per share. The stock has risen 15.72 per cent since the year began.
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(Top image via Telesat)
