Source: Telesat.
  • Telesat (TSX:TSAT), a global leader in satellite operations, will receive a C$2.14 billion loan from the Government of Canada to develop the company’s Lightspeed satellite network
  • The Lightspeed network will be composed of 198 low-earth orbit global broadband satellites tailored to enterprise needs
  • Telesat is one of the world’s largest satellite operators, boasting a more than 50-year track record of expertise and innovation across a diversity of industries
  • Telesat stock (TSX:TSAT) has added 4.64 per cent year-over-year, but has lost 76.87 per cent since 2021

Telesat (TSX:TSAT), a global leader in satellite operations, will receive a C$2.14 billion loan from the Government of Canada to develop the company’s Lightspeed satellite network.

The company received confirmation of the investment in a letter from François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry, after several months of negotiations.

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, according to Monday’s news release.

The loan carries a 15-year maturity and a floating interest rate 4.75 per cent above the Canadian overnight repo rate average. Interest is payable in-kind during the construction of Telesat Lightspeed, followed by a 10-year structured amortization.

The government will also receive warrants for 10 per cent of the common shares of Telesat LEO – a wholly owned Telesat subsidiary that is developing and will own the new satellite network – granting Telesat LEO a valuation of US$3 billion. At the time of writing, Telesat commands a market capitalization of only C$575 million.

“Telesat Lightspeed is a highly innovative and disruptive global broadband network and the largest space program in Canada’s long and distinguished history as a space-faring nation,” Dan Goldberg, Telesat’s president and chief executive officer, said in a statement. “I am delighted with the engagement we have had with the Government of Canada on this flagship program, which will help bridge the global digital divide, create and sustain thousands of high-quality jobs in Canada, spur domestic innovation, investment and exports, and ensure that Canada is at the forefront of the rapidly growing new space economy. The Government of Canada has been a strong supporter of the Telesat Lightspeed program and we applaud their leadership and foresight.”

“We estimate that, in addition to the roughly US$2 billion of capital cost savings, we will realize roughly US$750 million of savings in reduced borrowing costs relative to the original Telesat Lightspeed program,” Goldberg added. “Telesat Lightspeed will revolutionize broadband connectivity for enterprise and government users and represents a highly compelling growth and value creation opportunity for Telesat and its stakeholders.”

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) last traded at C$11.51 per share. The stock has added 4.64 per cent year-over-year, but has lost 76.87 per cent since 2021.

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