MONTREAL, Feb 18 (Reuters) - Quebec’s provincial government has signed a preliminary agreement to invest C$400 million ($315 million) in Telesat’s low earth orbit (LEO) telecommunications satellite network, the parties said on Thursday.
Telesat is owned by Pension Investment Board and Loral Space & Communications Inc, but it plans to merge Telesat Canada with Loral to become a public entity on the Nasdaq this summer.
Under a memorandum of understanding, Quebec’s investment “will consist of C$200 million in preferred equity as well as a C$200 million loan,” the parties said in a statement.
The deal is expected to be finalized “in coming months,” they added.
“The pandemic will have an ongoing impact on aircraft construction, and this is the ideal time to accelerate the pace of satellite development, a new and promising field for the aerospace industry,” Quebec Premier Francois Legault said in the statement.
Earlier this month, Telesat tapped Thales Alenia Space to build some 300 satellites in a contract worth $3 billion.
On Thursday, Telesat said Canada’s space technology company MDA would manufacture phased array antennas for those satellites, but did not give a value for the contract.
Telesat also said Thales Alenia Space would establish its final manufacturing of the satellites in Quebec, without giving details. The first satellites will be built in France.
The so-called Lightspeed network will base its operations at a “new campus” in Gatineau, Quebec, Telesat President and Chief Executive Dan Goldberg said in an interview.
“Kudos to the government of Quebec for identifying this as a promising sector,” Goldberg said.
Telesat plans C$1.6 billion in total investments in Quebec that, together with Canadian space technology developer MDA, would create 600 high-skilled jobs, the company said.
Canada’s federal government has already put up C$600 million in a partnership with Telesat to provide broadband in remote areas. ($1 = 1.2698 Canadian dollars) (Reporting by Steve Scherer in Ottawa and Allison Lampert in Montreal; Editing by Richard Chang)