Business · Companies · 5 hrs ago
Telesat lenders propose new plan to address looming debt deadline
Lenders to Ottawa-based satellite operator Telesat proposed a new debt plan as the company approaches a major repayment deadline.
Telesat has about US$1.71 billion due on Dec.
6, with another US$438 million due in 2027.
The debt is tied to its older geostationary satellite business, while Telesat is also building its Lightspeed network of low-Earth-orbit satellites.
The lenders’ offer would repay their principal and interest using a $1.7-billion share offering and a $1.5-billion loan.
Telesat says it has received the proposals but has not negotiated their terms, while both sides say they want a resolution.
The lenders are also in a legal dispute with Telesat over the transfer of its low-Earth-orbit satellite business to a new subsidiary.
A negotiated solution is still needed before the debt comes due, and Telesat says it is seeking to engage with its creditors in good faith.
Telesat’s lenders have proposed a new plan to address about US$1.71-billion in debt due on Dec. 6.
The proposal would give lenders their principal and accrued interest through a US$1.7-billion equity rights offering and a US$1.5-billion loan.
The lenders presented the plan to Telesat on Oct. 14, but the company has not negotiated on its terms.
The lenders say there has been no progress despite their proposals, while Telesat says it and its advisers are seeking good-faith talks.
The company is also in a legal dispute with the lenders over the transfer of its low-Earth-orbit satellite business to a subsidiary.
- Who
- Telesat Corp. and its lenders, including Silver Point Capital, GoldenTree Asset Management and Sound Point Capital Management.
- What
- The lenders proposed a recapitalization plan to address Telesat’s approaching debt repayments.
- When
- The latest proposal was presented on Oct. 14. About US$1.71-billion in debt is due Dec. 6.
- Where
- Telesat is based in Ottawa, Canada.
- Why
- Telesat has said its cash flow is insufficient to meet all its debt obligations.
Telesat
Its lenders
Proposal talks
Telesat
Telesat says it and its advisers are seeking to engage with debt holders in good faith.
Its lenders
The lenders say they have made multiple proposals but there has been no progress.
Debt solution
Telesat
Telesat has not negotiated on the terms of either the latest proposal or the earlier one.
Its lenders
The lenders’ latest plan would repay 100 per cent of their principal, plus accrued interest, through an equity rights offering and a loan.
Satellite business
Telesat
Telesat is in a legal battle with lenders over the transfer of its low-Earth-orbit satellite business to a subsidiary.
Its lenders
The lenders accuse Telesat of illegally moving that business, which they describe as its most valuable asset, out of their reach.
The lenders put forward an earlier proposal to Telesat.
The lenders presented their latest recapitalization proposal to Telesat.
About US$1.71-billion in debt is due for repayment.
Another US$438-million of Telesat debt is due to mature.
- Debt due Dec. 6
- Approximately US$1.71-billion
- Additional debt maturing in 2027
- US$438-million
- Proposed equity rights offering
- US$1.7-billion, with shares offered at $31.50
- Proposed loan
- US$1.5-billion
- Lenders named
- Silver Point Capital, GoldenTree Asset Management and Sound Point Capital Management
- Lightspeed service start
- Slated for 2028
1 source
What people are saying
continue to seek to engage with the company’s debt holders in good faith to reach a negotiated resolution.
It’s time for Telesat to match its words with action and work with us on a solution that protects this vital Canadian company and its stakeholders.
welcome Telesat’s commitment to engage in good faith, but despite multiple proposals from our group to address its imminent debt maturities, there has been no progress.
That was the most surprising part, that the government is stepping into this whole thing.