Friday, April 20, 2018

Telesat Moves Forward with New Offices, New Plans, New Challenges and New Funding

         By Chuck Black

It's twenty years older than the Canadian Space Agency (CSA) so Ottawa, ON based Telesat has more than a little experience putting together useful commercial deals funded from a variety of sources without the need for a domestic space agency to act as the prime contractor.

Out with the old and in with the new. As outlined in the March 12th, 2018 Ottawa Business Journal post, " Ottawa satellite firm Telesat moving downtown with new Place Bell lease," the satellite technologies firm "is preparing to move from its east-end campus to two floors inside the office tower at 160 Elgin St. (in downtown Ottawa) as part of a bid to attract new talent " Younger employees generally prefer a more vibrant downtown environment, according to the article. Photo c/o Telesat.

In the post Emerson Aerospace Review landscape, that skill-set will come in handy. The company has announced that it expects to begin the first trials on its new low Earth orbit (LEO) communications constellation sometime later this year.

As outlined in the April 18th, 2018 Via Satellite post, "Backed by Government, Telesat to Initiate First Customer LEO Trials This Year," Telesat will be depending on Federal government contributions from the $100Mln CDN Strategic Innovation Fund, allocated in the 2018 Federal budget to support upcoming LEO satellite projects to bolster a $20Mln CDN direct contribution from the government of Ontario, to help fund the constellation.

As outlined in the post:
The investments seem to reflect the government’s confidence in LEO constellations as a solution to bridging Canada’s digital divide. 
There, the issue of rural broadband is a salient one due to the country’s distinct, often harsh geography and population distribution. At least half of its approximately 36 million citizens live south of the Washington-Oregon border, while most of the remainder live in sparse communities scattered across a 3.5 million square mile landscape. 
Telesat believes blanketing these rural regions with satellite-based connectivity is a profitable niche, and will work hand-in-hand with the Canadian government to do so.
The Souyz-2 spacecraft with Meteor-M satellite and 18 additional small satellites, including one from Telesat, launches from Russia's new Vostochny cosmodrome, near the town of Tsiolkovsky in Amur region, Russia, on November 28th, 2017. As outlined in the November 28th, 2017 Associated Press post, "Canadian satellite lost after Russian rocket fails during launch," the failure of the booster's final stage prevented the satellites from entering orbit and led to the failure of the mission. It was one of two Telesat satellites designed to test out concepts for the Telesat LEO constellation. A second test satellite was launched successfully on January 12th, 2018 aboard a Polar Satellite Launch Vehicle (PSLV) operated by the Indian Space Research Organization (ISRO) Photo c/o Stringer/Reuters.

As outlined in the April 16th, 2018 Telesat press release, "Telesat Canada Announces Preliminary Revenue and Adjusted EBITDA1 for the Quarter Ending March 31, 2018," the company revenues are expected to keep even with last year’s performance.

The projections were released early in connection with a potential amendment to its US$2.43Bln CDN loan facility, a formal financial assistance program offered by lending institutions to help a company that requires operating capital. Telesat intends to file "full interim unaudited consolidated financial statements for the period prepared in accordance with IFRS" on or about May 3rd, 2018.

The loan modification might not just be for new operating capital. It could also mean that a corporate restructuring is in store for Telesat.

As outlined in the March 16th, 2018 Space News post, "Loral warns of possible Telesat legal battle, Xtar restructuring," New York, NY based Loral Space and Communications has indicated that it wants to move ahead with a “strategic transaction” involving fleet operator Telesat that may spark a legal fight with Telesat’s other major shareholder, the Public Sector Pension Investment Board (PSP Investments), a Canadian crown corporation established by an act of parliament in September 1999.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

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