Telesat (NASDAQ and TSX: TSAT), one of the world’s largest and most innovative satellite operators, today announced the completion of funding agreements with the Government of Canada and the Government of Quebec for its highly advanced Telesat Lightspeed Low Earth Orbit (LEO) broadband satellite constellation. With this milestone completed, Telesat now has all financing sources in place to fund the global Telesat Lightspeed network, including the satellites, launch vehicles to deploy them, an integrated terrestrial network of landing stations and points of presence throughout the world, and the business and operational support systems for the network. All amounts are in Canadian dollars unless otherwise noted.
As previously disclosed, the Government of Canada loan is for $2.14 billion and will carry a floating interest rate that is 4.75% above the Canadian Overnight Repo Rate Average (CORRA) with a 15-year maturity. Interest is payable in-kind during the Telesat Lightspeed construction period, followed by a 10-year sculpted amortization. Furthermore, the Government of Canada is receiving warrants for 10% of the common shares of Telesat LEO based upon an equity valuation for Telesat LEO of US$3 billion. The Government of Quebec loan is for $400 million and has terms that largely mirror the Government of Canada loan but with warrants for 1.87%, in proportion to the smaller loan amount. The borrower under each loan, Telesat LEO Inc. (Telesat LEO), is a subsidiary of Telesat.
“We are pleased to conclude these funding arrangements with the governments of Canada and Quebec as we make strong progress on the build-out of the revolutionary Telesat Lightspeed constellation, the largest space program in Canada’s history,” said Dan Goldberg, President and CEO of Telesat. “Telesat Lightspeed will help bridge the digital divide in Canada and throughout the world, create and sustain thousands of high-quality jobs in Canada, deliver billions of dollars of investment in the Canadian economy, spur domestic innovation and exports, and ensure that Canada and Quebec are at the forefront of the rapidly growing New Space Economy.”
The Telesat Lightspeed network is expected to play a critical role in bridging the digital divide by expanding the reach of internet and 5G networks in unserved and underserved communities in Canada and throughout the world, with affordable, high-speed broadband connectivity. In addition, the Telesat Lightspeed network is expected to help governments — including the Government of Canada — modernize their satellite communications technology and make meaningful contributions to North Atlantic Treaty Organization (NATO) and North American Aerospace Defense Command (NORAD) modernization to bolster defence for Canada and its allies.
Telesat has increased its Canadian workforce by approximately 33% in the last 12 months and expects 2024 capital expenditures for the program to be in the range of $1 billion to $1.4 billion. Telesat plans to launch the first Telesat Lightspeed satellites in mid-2026. Since Telesat’s announcement of MDA Space as its prime satellite manufacturer in August 2023, MDA has selected and onboarded over 90 percent of the suppliers for the Telesat Lightspeed program.
The Rt. Hon. Justin Trudeau, Prime Minister of Canada commented, “Our government is focused on Canadians and today’s announcement with Telesat and MDA is our commitment in action. 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. We’re putting Canada at the forefront of opportunity, with a fair chance for everyone to succeed.”
François Legault, Premier of Quebec added, “This is good news for our economy, not only are we consolidating 650 existing jobs, but we are creating nearly 1000 paying jobs in a cutting-edge sector. It is also a strategic project for Quebec. With the Telesat and MDA project, the message we are sending today is that Quebec continues to stand out. The future of aerospace is happening in Quebec!”
The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry said, “Today, we are cementing Canada’s position as a global leader in the new space economy. This investment will create high-skilled jobs, support innovation, and secure Canada’s telecommunications systems. This agreement with Telesat Lightspeed, the largest space program ever conceived and built in Canada, will have a significant impact on the growing network of Canadian suppliers and talent, offering critical support to the sector as it continues to flourish.”
Christine Fréchette, Minister of Economy, Innovation and Energy, Minister responsible for Regional Economic Development and Minister responsible for the Metropolis and the Montréal region commented, “This satellite network is an effective way to provide high-speed telecommunications across all regions of Quebec. We are proud to support these two companies as they drive technological innovation, helping to position Quebec as a true space industry leader. And we are even prouder to see that companies are locating here to take advantage of all that Québec has to offer!”
The Honourable Gudie Hutchings, Minister of Rural Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency concluded, “High-speed Internet is no longer a luxury — it is a necessity. Today’s investment in Telesat’s Lightspeed project will help the federal government achieve its goal of connecting all Canadians to high-speed Internet by 2030 so that they get better access to the services they need, no matter where they live.”
