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(Bloomberg) — Telesat Corp. and MDA Space Ltd. shares soared after a record deal to build an Arctic satellite system for Canada’s military.
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Ottawa-based Telesat, Canada’s largest domestic satellite operator, said it signed a 15-year contract for its forthcoming constellation of low-Earth orbit satellites to provide secure connectivity to the country’s armed forces. With two five-year option periods, its total value is C$2.7 billion ($1.9 billion).
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Telesat shares jumped 32% to C$52.91 as of 12:39 p.m. in New York, the most intraday since August 2023. MDA shares in Toronto jumped 16% to C$49.04, their biggest intraday rise in a year.
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Telesat is pivoting from decades of broadcasting television and data signals from geosynchronous orbit 22,300 miles away from Earth. Instead, it’s building a brand-new fleet, dubbed Lightspeed, to whiz around in low-Earth orbit, which is much closer and offers faster transmissions.
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The audacious financial maneuvers required to finance the new satellites have put pressure on the company’s balance sheet.
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Telesat is positioning Lightspeed as an alternative to the technology currently dominated by Starlink, run by Elon Musk’s Space Exploration Technologies Corp. The Canadian service is not due to begin until the first quarter of 2028.
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Telesat said in a statement Tuesday that the deal increases the “fully-funded” size of its planned Lightspeed fleet by 69 satellites to a total of 225, and milestone-based payments start in the third quarter of this year. It’s the largest contract in the company’s 57-year history.
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The extra satellites mean a contract extension worth C$474 million for Ontario-based MDA Space, which is helping build the fleet.
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The project fits with Prime Minister Mark Carney’s ambition to reduce his country’s reliance on the US. However, Canada can’t completely escape a dependence on Musk’s SpaceX: It will use the US company’s rockets to launch the satellites.
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