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Loral to Combine with Canada-Based Telesat to Form New Telesat
Friday 27 November 2020

US-based satellite communications company Loral Space and Communications Inc. (NASDAQ: LORL) has agreed to combine with Telesat Canada, a telecommunications and direct broadcast satellite provider, to form New Telesat, the company said.

The transaction is expected to close in the second or third quarter of 2021.

As of November 23, 2020, there were outstanding 21,427,078 shares of Loral voting common stock, 9,505,673 shares of Loral non--voting common stock and 92,857 Loral restricted stock units.

Loral and Telesat will make certain cash payments to PSP Investments in connection with the transaction, including a payment of USD 7m and a payment to adjust for the value of Loral's non--Telesat assets and liabilities at the time of the closing of the transaction.

Upon closing of the transaction, the stockholders in Loral, together with PSP Investments and certain current and former management shareholders of Telesat, will beneficially own all of the equity in New Telesat in approximately the same proportion as their current, indirect ownership in Telesat.

Loral stockholders not affiliated with the funds managed by MHR Fund Management LLC (MHR Funds) will beneficially own 26.1% of the economic interests in New Telesat, with the MHR Funds, PSP Investments and management shareholders of Telesat beneficially owning the remaining 36.6%, 36.7% and 0.7%, respectively, of the economic interests in New Telesat.

This transaction will consolidate all equity ownership of Telesat in the capital structure of New Telesat to deliver value to all Loral stockholders.

In connection with the transaction, LionTree and Credit Suisse Securities LLC acted as financial advisors, Willkie Farr and Gallagher LLP acted as legal counsel, McCarthy Tétrault LLP acted as Canadian legal counsel, and DLA Piper LLP acted as US tax counsel, to Loral. Cleary Gottlieb Steen and Hamilton LLP acted as legal counsel, and Goodmans LLP acted as Canadian legal counsel, to the Special Committee.

Loral Space and Communications Inc. holds a 62.7% economic interest Telesat Canada, a global operator of telecommunications and direct broadcast satellites used to distribute video entertainment programming and broadband data and to provide access to Internet services and other value-added communications services. Telesat is also developing a global constellation of low earth orbit satellites.

Telesat is offering broadband internet connectivity worldwide by developing advanced constellation of low earth orbit satellites and integrated terrestrial infrastructure.
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Date Published: 27/11/2020

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