United States securities and exchange commission logo
March 15, 2021
Christopher S. DiFrancesco
Vice President, General Counsel and Secretary
Telesat Corporation
c/o Telesat Canada
160 Elgin Street, Suite 2100
Ottawa, Ontario, Canada K2P 2P7
Re: Telesat Corporation
Draft Registration
Statement on Form F-4
Submitted February
11, 2021
CIK No. 0001845840
Dear Mr. DiFrancesco:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Draft Registration Statement filed on Form F-1
Q. Am I being asked to vote on any other proposals at the Loral
Stockholder Meeting in addition
to the Transaction Proposal?, page 1
1. Please clarify that
Loral received a notice from Nasdaq that it did not hold an annual
stockholder meeting in
2020 in violation of Nasdaq rules, and Loral is seeking an
extension through June
2021 to comply with such rules. You should also indicate that the
Loral Stockholder
Meeting and non-transaction related proposals are meant to satisfy the
requirement of a 2020
annual meeting.
Questions and Answers
Q. What will happen as a result of the Transaction?, page 1
Christopher S. DiFrancesco
FirstName LastNameChristopher S. DiFrancesco
Telesat Corporation
Comapany
March NameTelesat Corporation
15, 2021
March2 15, 2021 Page 2
Page
FirstName LastName
2. Please clarify the corporate governance provisions that favor Canadian
citizens and
explain the purpose for these provisions. We note, for example, that
Canadian investors
will have majority voting power in certain situations.
Q. What are Lorals reasons for the Transaction?, page 2
3. We note that one of your reasons for the transaction is to facilitate
capital raising to fund
the development and launch of your proposed LEO Constellation. Please
quantify the
approximate amount of funds needed to bring your LEO Constellation to
market.
What vote is required to approve the proposals?, page 4
4. Please describe the Requisite Stockholder Vote necessary to approve
the Transaction
Proposal.
Summary, page 12
5. We note that Loral stockholders may opt to exchange their shares of
common stock for
either Telesat Corp. common shares or Telesat Partnership units that
are convertible into
Telesat Corp. common stock in 6 months. Please discuss the advantages
and
disadvantages of either option. Further, please clarify the purpose of
the creation of the
Telesat Partnership as part of the reorganization and merger
transactions.
6. We note that PSP Investments may receive either Class C common shares
or Class C
units, at its option. Please clarify whether PSP Investments has made
their decisions
and/or if it will be known prior to effectiveness of your registration
statement. Further,
please clarify whether you can reasonably estimate prior to
effectiveness the number of
Class A, Class B, or Class C shares or units that would be issued upon
the close of the
merger.
7. Please clarify which Public Shares of Telesat Corp will be listed on
the Nasdaq upon the
close of the merger.
8. You disclose that you have orders or backlog of $513 million for
Telesat Lightspeed, but
the system will not be commercialized until 2023. Where appropriate,
please provide a
brief description of the Lightspeed backlog and any material orders,
including if they
include significant pre-launch pricing discounts.
Risk Factors
Telesat Corporation satellite launches may be delayed, it may suffer launch
failures or its
satellites may fail to reach their planned orbit, page 47
9. Please quantify the amount of prepayments that you received for
Telesat Lightspeed that
would be subject to for return if there are significant delays in
launching your satellites by
2023. Further, please clarify if such delays would involve other
contractual penalties or
damages to your customers for significant delays.
Christopher S. DiFrancesco
FirstName LastNameChristopher S. DiFrancesco
Telesat Corporation
Comapany
March NameTelesat Corporation
15, 2021
March3 15, 2021 Page 3
Page
FirstName LastName
Opinion of LionTree Advisors LLC, page 92
10. Your summary of the LionTree fairness opinion indicates an estimated
aggregate net
value of the Transaction to the Loral common stockholders ranging
between $27.077
million and $51.644 million. Please clarify how the value of the
consideration received
by non-affiliated stockholders was assessed and how that relates to
the net value
provided.
Governing Documents Following the Transaction and the Merger, page 113
11. Please provide a more detailed description of the veto rights that MHR
and PSP
Investments will have under the Investors Rights Agreement to describe
all material
actions implicated and all material corporate governance changes.
The Competitive Landscape for Our Services, page 183
12. We note you expect to generate C$1.2 billion in revenue which includes
a contribution of
up to C$600 million from the Government of Canada. Clarify and explain
to us the nature
of the Government of Canada's contribution. Tell us if you expect the
Government of
Canada to contract with Telesat as a customer or whether it will
provide construction or
other subsidies. Also explain to us how you will account for the
Government of Canada's
contribution.
Management's Discussion and Analysis
Results of Operations, page 194
13. It appears, as of September 30, 2020, you have recognized in excess of
C$15 million of a
C$85 million contribution to your LEO initiative. To the extent
material, describe and
quantify the impact of this government grant on your results of
operations to
date. Explain the pertinent terms of this grant and discuss your
expectations of its impact
on your future results and cash flows.
Telesat Corporation Unaudited Pro Forma Condensed Consolidated Financial
Information, page
248
14. We note that the planned transaction will be accounted for as an
equity reorganization
because you expect it will not result in a material change to the
economic and voting
interest of the shareholders of Telesat. Please explain and illustrate
for us how there will
be no such material changes, given the complexity of the shareholder
voting
and economic ownership arrangements and restrictions of the direct and
indirect
ownership interests in Telesat before and after the planned
transaction. In your response
please address the various pre-planned transaction shareholder voting
rights agreements
and shareholder voting restrictions along with the full, limited and
special post-closing
Telesat Corporation voting rights disclosed in the Post-Closing
Securities table on page
19. Explain your consideration of the voting authority of the Golden
Share in this regard.
Christopher S. DiFrancesco
FirstName LastNameChristopher S. DiFrancesco
Telesat Corporation
Comapany
March NameTelesat Corporation
15, 2021
March4 15, 2021 Page 4
Page
FirstName LastName
15. Please explain for us your consideration of the specific
interpretative guidance in IFRS 3
and IFRS 10 you expect to rely upon to account for the planned
transactions as an equity
reorganization.
16. Tell us and disclose whether the planned reorganization is expect to
have a material
impact on the tax basis of the combined assets and liabilities. If so,
also tell us whether
the parties to the planned transactions expect to enter into
agreements comparable to
tax receivable agreements and how such agreement will be accounted
for.
Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020,
page 251
17. We note Loral will distribute $61.8 million, C$9.3 million, and C$7.9
million prior to the
reorganization. In separate pro forma adjustment and subtotal columns,
please give pro
forma effect to these distributions on Loral's balance sheet prior to
presenting the effects
of the Transaction.
18. We note under Recent Developments on page 20 the transfer of assets
and prepayment of
outstanding term loans. In separate adjustment and subtotal columns
following the
Historical Telesat balance sheet and income statements, give pro forma
effect to these
transactions before presenting the pro forma effects of the
Transaction or advise us.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
(2) Capital transaction
2.2: Share capital , page 256
19. The pro forma adjustment for Share Capital on page 256 does not appear
to foot. Please
revise or advise.
Note 3: Limited Partnership Presentation, page 259
20. We note that Loral stockholders will be able to elect to receive
exchangeable Telesat
Partnership units instead of Telesat Corporation public shares. We
further note that the
results of this election may have a material impact on how Telesat
Corporation and
Telesat Partnership will present their financial statements upon and
after consummation of
the planned reorganization/combination transaction. Please either
advise or revise to
present pro forma Telesat Partnership financial information giving
effect to the range of
results in accordance with Rule 11-02(a)(10) of Regulation S-X.
Financial Statements
Telesat Unaudited Interim Condensed Consolidated Financial Statements
Note 13: Government Grant, page 327
21. Please disclose how you are accounting for the a non-refundable
government
contribution. Disclose the pertinent terms of this grant and if
applicable, the amount
recognized as either a reduction of expenses and/or acquired assets.
Christopher S. DiFrancesco
Telesat Corporation
March 15, 2021
Page 5
Comparison of Rights of Telesat Corporation Shareholders..., page 360
22. We note that you have an exclusive forum provision for certain
shareholder claims that
are restricted to the Superior Court of Justice of the Province of
British Columbia per page
H-33. Please add a comparison of rights that explains the differences as
it relates to forum
restrictions. Further, please consider adding a risk factor that
addresses your exclusive
forum provision and also explains how it would be applied for claims
under the Securities
or Exchange Act.
23. In your background of the transaction narrative, you indicate that MHR
and PSP
Investments sought a corporate opportunity waiver, which appears to have
been included
on page H-25. Please add the corporate opportunity provision in your
comparison of
rights table and add a risk factor that discusses any conflicts of
interests that may result of
this provision. Further, please clarify whether MHR or PSP, or their
respective affiliates
would compete in similar markets and may compete with you for future
acquisitions,
customers, or funding.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Joseph Kempf, Staff Accountant, at (202) 551-3352 or
Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions regarding
comments on the financial statements and related matters. Please contact Edwin
Kim, Staff
Attorney, at (202) 551-3297 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
FirstName LastNameChristopher S. DiFrancesco
Division of
Corporation Finance
Comapany NameTelesat Corporation
Office of
Technology
March 15, 2021 Page 5
cc: Maurice M. Lefkort, Esq.
FirstName LastName