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Ibadan, 2 April 2024. – Telesat has announced that it received a letter from Canada’s Minister of Innovation, Science and Industry regarding an investment in Telesat Lightspeed. The letter states that following several months of negotiations, the Government of Canada (GoC) is ready to invest C$2.14 billion in Telesat Lightspeed by way of a loan to Telesat LEO Inc., a wholly owned subsidiary of Telesat, which is developing and will own and operate the highly advanced Telesat Lightspeed Low Earth Orbit (LEO) global broadband satellite constellation.
The loan will carry a floating interest rate that is 4.75% above the Canadian Overnight Repo Rate Average (CORRA) with a 15-year maturity. Furthermore, interest is payable in kind during the Telesat Lightspeed construction period, which will come before a 10-year sculpted amortization. In addition, Telesat LEO Inc. will provide the GoC with warrants for 10% of the common shares of Telesat LEO based upon an equity valuation for Telesat LEO of US$3 billion.
Speaking on the investment, Dan Goldberg, Telesat CEO, said, “I am happy 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 CEO also added, “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.”
