Shares in Loral Space & Communications were buoyed this week on rumours that a bank had been picked to sell the US group best known for its stake in Canadian satellite operator Telesat.
Speculation from Reuters that Credit Suisse is exploring a sale…
Shares in Loral Space & Communications were buoyed this week on rumours that a bank had been picked to sell the US group best known for its stake in Canadian satellite operator Telesat.
Speculation from Reuters that Credit Suisse is exploring a sale comes after reports back in October said Mark Rachesky, Loral’s chairman and founder of its most significant shareholder MHR Fund Management, was putting it on the block.
The process is being run alongside Morgan Stanley’s attempt to find a buyer for Telesat, which sees Loral as its majority economic owner, added Reuters.
Canada’s Public Sector Pension Investment Board holds two-thirds of Telesat’s voting stock, and there is reportedly no deal between them yet to jointly sell the operator.
Telesat has been a favourite of the rumour mill since its owners sought a reported US$7bn from a sale around three years ago, before pulling it after being unable to agree on a price. Instead, the satellite operator undertook a US$2.55bn recapitalisation transaction in order to return funds to its shareholders.
The list of potential purchasers at the time was dominated by private equity players, with a consortium of Blackstone, KKR and Providence believed to have held discussions. Carlyle was also rumoured to have been in the running, while the sole strategic interest came from Intelsat.
Telesat is now Loral’s most notable investment following the sale of its Space Systems Loral satellite manufacturing subsidiary back in 2012 to MacDonald, Dettwiler and Associates, which is also based in Canada. Credit Suisse and JP Morgan were Loral’s financial advisers for that deal, with Willkie Farr & Gallagher serving as legal advisers.
Loral also owns 56% of XTAR, a joint venture it shares with Spanish satellite operator Hisdesat that offers X-band services to government customers.
Loral was unable to comment before the press deadline.
Its shares closed up 2.9% at US$78.04 on 22 January after surging as much as 8% on the news. They had fallen back to around US$75.54 as SatelliteFinance went to press.
