Prime Minister Mark Carney has put Ottawa-based Telesat at the centre of his push to cut Canada’s reliance on Starlink, but the company is racing a December debt deadline with no Lightspeed satellites in orbit yet.
Wall Street lenders put a fresh rescue plan on the table in October, according to a Financial Times report.
The paper reviewed a confidential October proposal from lenders including Greenwich, Connecticut-based Silver Point Capital and New York’s GoldenTree Asset Management and Sound Point Capital Management.
Under that plan, current shareholders would be asked to buy C$1.7 billion in new shares, and the lenders would add C$1.5 billion in new loans to pay off debt that’s coming due.
The lenders also want first claim on all of Telesat’s ownership of Lightspeed, the planned satellite network aimed at government, military and business customers, if the company can’t pay.
Taxpayer money is on the line too, since federal support for Lightspeed already runs into the billions in loans and contracts, including the Arctic military deal awarded in August, as part of Ottawa’s more than $5 billion bet on the company.
Carney has still pointed to Telesat as part of his call for a satellite system Canada controls, and he promoted Lightspeed to investors, including a minority-stake opportunity at September’s Canada Investment Summit in Toronto.
Despite the Ottawa address and the federal backing, much of the money behind Telesat comes from the United States. The Financial Times notes that New York-based MHR Fund Management, led by Mark Rachesky, is among Telesat’s largest shareholders alongside Canada’s PSP Investments, while the creditor group pressing the October rescue is made up of U.S. funds based in New York and Connecticut.
None of the 225 Lightspeed satellites are in orbit yet, and the paper says the network is not expected to enter service until early 2028. Telesat still runs about 14 to 15 older satellites that sit far above Earth, while Starlink already has roughly 11,150 satellites in orbit and sells home internet that more than 500,000 Canadians rely on, something Lightspeed isn’t built to offer.
Telesat also plans to launch those satellites on SpaceX Falcon 9 rockets, so Carney’s plan to lean less on Elon Musk still depends on Musk’s launchers to get off the ground.
The more pressing issue for Telesat is the roughly C$2.3 billion that comes due on December 6, with another C$600 million owed next year, according to the report, while money from that older fleet keeps shrinking as customers move to newer networks.
Lenders allege that in September 2025 Telesat moved 62 per cent of its Lightspeed ownership out of reach of the assets backing their loans, leaving them tied to the shrinking older business. Telesat disputes those claims, has called related lawsuits without merit, and says it will defend itself in New York and Canadian courts.
Chief executive Dan Goldberg said the company remains focused on a refinancing that is fair to all stakeholders. People working with the creditors told the Financial Times the two sides have still not had much substantive engagement on the debt fight.
ATB Cormark Capital Markets analyst David McFadgen warned that both sides think they have the legal upper hand, so the dispute could run to the December 6 deadline and Telesat could default. That would leave Carney’s plan to cut Canada’s dependence on a single foreign satellite system, and the public money behind it, tied to a company fighting its own lenders in court.
Should Ottawa keep putting taxpayer money behind Lightspeed while the October creditor plan, the missing satellites and the December repayment all hang unresolved?
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