OTTAWA – Telesat Canada said late Monday it has signed an agreement to relinquish its leasehold interest in the Telstar 10 satellite to Hong Kong’s APT Satellite Company Limited, the bird’s owner, and to transfer related customer contracts.
The deal will bring in US$69.5 million, subject to adjustment, to the Canadian company. Proceeds will be used to fund replacement satellites or repay debt, in accordance with Telesat’s financing arrangements, says the press release.
The transaction announced today is one of the transactions previously disclosed as being under consideration involving the possible disposition of certain of Telesat’s international satellites. The parties expect to complete the transaction in July 2009.
Telesat, through its predecessor company, Loral Skynet, has had a lease arrangement with APT on Telstar 10 for almost a decade. APT operates the satellite and also provides technical support to many Telesat customers.
"Given APT’s deep involvement with Telstar 10, the complex regulatory environment associated with the satellite, and the upcoming requirement to replace Telstar 10, this transaction makes strong strategic sense for both parties and ensures that the users of Telstar 10 will continue to receive high quality satellite services for the life of the satellite and its replacement,” said Telesat CEO Dan Goldberg.
For the first quarter of 2009, Telstar 10 accounted for approximately 5% of Telesat’s revenue and less than 1% of its $5.3 billion contracted backlog.
Telstar 10 a hybrid satellite operating in the standard and extended C-bands and the standard Ku-band frequency ranges. The C-Band payload covers Asia, Japan, Australia, and parts of Europe and Africa. The Ku-band payload has focused coverage of China and Korea, including Hong Kong, Macau and Taiwan.
As announced previously, Telesat continues to be in discussions regarding the potential sale of its interests in another of its international satellites (which include Telstar 14, Telstar 11N and Telstar 12). However, Telesat cannot at this time assess the probability of concluding any further transaction under discussion or under what terms, including price, the assets may be sold, according to the press release.
