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It took much longer than expected but today Telesat announced it had completed $2.54 billion funding agreements with the Government of Canada and Quebec meaning the company has all the financing in place for the Lightspeed low Earth Orbit satellite constellation.
In a news release Telesat said the funding will cover manufacturing of “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.”
Separately, MDA Space today announced an expansion of its satellite manufacturing facility in Sainte-Anne-de-Bellevue, Quebec which will double its capacity and allow it to build “two MDA AURORA digital satellites a day.” MDA Space is under contract to Telesat to build an initial 198 satellites for Telesat’s Lightspeed constellation which will be “powered by MDA AURORA technology.”
With respect to the completion of government financing, Telesat said, “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.”
Telesat said it had increased its workforce in the last 12 months by approximately 33%.
“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 Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry added, “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.”
