The shareholders of Loral Space & Communications have agreed to merge the company with its subsidiary Telesat to create a new Canada-based satellite group. Loral already holds almost two-thirds of Telesat shares. The deal is expected to give Telesat greater access to public capital markets through the stock market listing, while simplifying the corporate structure of both groups and maximising shareholder value.
MHR funds and the Public Sector Pension Investment Board (PSP Investments) will remain the largest shareholders in the 'New Telesat', as the merged group will be known. Their stakes will be respectively 36.6 percent and 36.7 percent, and the other existing Loral shareholders will receive comparable stakes in the new company. New Telesat shares will be listed on the Nasdaq Global Select Market, and the company is also considering a listing on a Canadian stock exchange.
The new company's governance provisions will contain special features designed to maintain majority Canadian board and voting control. It will be headquartered in Ottawa and led by Telesat Canada’s CEO Daniel Goldberg.
As part of the deal, Loral will pay in December a special dividend of CAD 1.50 per share, for a total of CAD 46.4 million. This completes the company's pledge to return all excess cash flow to shareholders since it exited the satellite manufacturing business.
The transaction is expected to close in the second or third quarter of 2021, subject to regulatory approvals and the approval of Loral’s stockholders, including a majority of Loral’s stockholders not affiliated with MHR Fund Management, PSP Investments or other transaction participants.
