Ottawa-based Telesat has gone public on the Toronto Stock Exchange and Nasdaq in a bid to raise capital for its multibillion-dollar effort to deliver high-speed internet to remote regions via a new network of satellites.
The satellite communications firm began trading on the two exchanges last Friday under the ticker symbol TSAT. CEO Dan Goldberg said Tuesday the move will allow the company to tap into the public markets as it looks to get its $6.5-billion low-Earth-orbit satellite project off the ground.
“It gives us more financial flexibility, and that’s important in this environment where we’re making big investments,” Goldberg said. “It’s a real benefit for us.”
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Telesat did not issue any new shares in the transaction, which saw Telesat and majority shareholder Loral Space and Communications become subsidiaries of a new publicly traded entity known as Telesat Corp.
Shareholders of Loral – a holding company that traded on the Nasdaq and owned 64 per cent of Telesat – effectively exchanged those shares for the same proportion of equity in the new company. Telesat’s other main shareholder, the Public Sector Pension Investment Board, will continue to own the remaining equity.
Goldberg said being publicly traded should give Telesat’s profile a lift as it prepares to go toe-to-toe against big-name competitors in the LEO space such as Elon Musk’s SpaceX and Jeff Bezos’s Amazon-backed Project Kuiper.
“That provides a nice platform, I think, to attract some additional visibility to the company,” he said.
$1.44B federal investment
Telesat’s new constellation, dubbed Telesat Lightspeed, will feature 298 satellites that will orbit about 1,300 kilometres above the Earth – far closer than traditional satellites. The network is designed to deliver broadband internet speeds comparable to those offered by fibre-optic networks to parts of the planet that currently can’t access such service.
Earlier this year, Telesat received $1.44 billion in federal funding and additional support from the Ontario and Quebec governments to help finance the constellation, which it hopes to start operating in 2024. But Goldberg said Tuesday Telesat Lightspeed’s debut will likely be delayed due to supply-chain issues at Thales Alenia Space, the French-Italian aerospace firm that’s building the satellites.
“We’re going to get pushed back a bit,” he said. “Given that we’re building a constellation of satellites with literally millions and millions of components, it’s not surprising that we weren’t able to avoid these dislocations entirely.”
Still, Goldberg said the supply-chain disruptions could have a silver lining. He said the delay will give Telesat engineers extra time to implement “design tweaks” that will improve the performance of the satellites.
“We will get there,” he said. “I think at the end of the day we’ll be a little bit later, but we’ll also have a little bit of a more capable constellation, and it was already very capable.”
After debuting at $54 on the TSX on Friday, Telesat’s shares have fallen nearly 20 per cent to $43.35 in late-day trading on Tuesday.