Telesat Lands C$2.14 Billion Government Loan to Support Telesat Lightspeed

By Robb M. Stewart

Telesat has secured a 2.14 billion Canadian dollars ($1.58 billion) investment from Ottawa in a business unit developing the company's flagship low Earth orbit global broadband satellite constellation.

The satellite operator said Monday that following months of negotiations the government of Canada has agreed the terms of a loan that in exchange will provide the government with warrants for 10% of the shares of the company's wholly-owned Telesat LEO based on an equity valuation for the subsidiary of $3 billion.

The loan will carry a floating interest rate that is 4.75% above the Canadian overnight repo rate average with a 15-year maturity. Interest is payable in-kind during the Telesat Lightspeed construction period, followed by a 10-year sculpted amortization, the company said.

President and Chief Executive Dan Goldberg said that in addition to roughly $2 billion of capital cost savings, the company will realize about $750 million of savings in reduced borrowing costs relative to the original program for Telesat Lightspeed, a global network that aims to revolutionize broadband connectivity for enterprise and government users.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 01, 2024 07:44 ET (11:44 GMT)

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