Telesat (TSX:TSAT) Secures Major Government Funding for Telesat Lightspeed LEO Constellation

September 16, 2024 12:38 AM EDT | By Team Kalkine Media
 Telesat (TSX:TSAT) Secures Major Government Funding for Telesat Lightspeed LEO Constellation
Image source: © Cookelma | Megapixl.com

Telesat (TSX:TSAT), a global satellite operator, has successfully finalized critical government funding agreements for its ambitious Telesat Lightspeed Low Earth Orbit (LEO) broadband satellite constellation project. This development marks a significant milestone in the company's efforts to revolutionize global connectivity with its advanced satellite network.

Funding Details

Telesat has secured substantial loans from both the Government of Canada and the Government of Québec to fully fund the Telesat Lightspeed network.

- Government of Canada Loan:

  - Amount: C$2.14 billion

  - Interest Rate: Floating, 4.75% above the Canadian Overnight Repo Rate Average (CORRA)

  - Maturity: 15 years

  - Interest Payments: Payable in-kind during the construction phase, followed by a 10-year sculpted amortization period

  - Warrants: 10% of Telesat LEO common shares, based on a US$3 billion equity valuation

- Government of Québec Loan:

  - Amount: C$400 million

  - Terms: Similar to the Government of Canada loan

  - Warrants: 1.87% of Telesat LEO common shares

The borrower under these loans is Telesat LEO Inc., a subsidiary of Telesat, which will be responsible for executing the project.

Prime Minister's Statement and Project Goals

Prime Minister Justin Trudeau highlighted the significance of the Telesat Lightspeed network, stating, “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.” This sentiment underscores the project’s potential impact on both the Canadian economy and the broader global digital landscape.

Bridging the Digital Divide

The Telesat Lightspeed network is designed to address the digital divide by offering affordable, high-speed broadband access to underserved and remote communities across Canada and internationally. The network will also support the modernization of satellite communications technology, contributing to NATO and NORAD modernization efforts, which will enhance defense capabilities for Canada and its allies.

Workforce Expansion and Future Plans

Telesat has significantly expanded its Canadian workforce, increasing it by approximately 33% over the past year. The company anticipates that capital expenditures for the Telesat Lightspeed program will range between C$1 billion and C$1.4 billion in 2024. The first satellites for the Lightspeed network are scheduled for launch in mid-2026. Since selecting MDA Space (TSX:MDA) as its prime satellite manufacturer in August 2023, MDA has onboarded over 90% of the suppliers required for the program.

Additionally, MDA recently secured a contract to provide antenna systems for three geostationary orbit satellites, further solidifying its role in advancing satellite technology.

The successful completion of these funding agreements marks a critical step for Telesat in bringing its groundbreaking Telesat Lightspeed LEO constellation to fruition. With substantial government backing and a clear roadmap for development, Telesat is poised to make a transformative impact on global broadband connectivity and satellite communications technology.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Incorporated (Kalkine Media), Business Number: 720744275BC0001 and is available for personal and non-commercial use only. The advice given by Kalkine Media through its Content is general information only and it does not take into account the user’s personal investment objectives, financial situation and specific needs. Users should make their own enquiries about any investment and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media is not registered as an investment adviser in Canada under either the provincial or territorial Securities Acts. Some of the Content on this website may be sponsored/non-sponsored, as applicable, however, on the date of publication of any such Content, none of the employees and/or associates of Kalkine Media hold positions in any of the stocks covered by Kalkine Media through its Content. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used in the Content are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used in the Content unless stated otherwise. The images/music that may be used in the Content are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.


Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.