# Telesat faces a $2.3-billion debt deadline in December, and its lenders want Lightspeed

> The FT reports Telesat's lenders are pushing for first claim on Lightspeed, Canada's planned Starlink alternative, if it can't pay. An analyst warns it could default.

- Published: 2026-11-03T16:55:00.000Z
- By: The Circuit Staff
- Type: News
- Topics: Telecom, Policy
- URL: https://thecircuit.ca/posts/2026-11-03-telesat-lenders-default-risk/

Telesat, the Canadian company building the country's main alternative to Starlink, has about $2.3 billion of debt due on Dec. 6, and its lenders are fighting over what they get if it can't pay. The Financial Times reviewed a confidential October proposal from the lenders, [iPhone in Canada reports](https://www.iphoneincanada.ca/2026/11/03/telesat-ft-october-creditor-rescue-default/). Another $600 million is due next year.

## What the lenders want

According to the FT's account, the lenders, who include U.S. funds Silver Point Capital, GoldenTree Asset Management and Sound Point Capital Management, proposed that:

- current shareholders buy $1.7 billion in new shares
- lenders add $1.5 billion in new loans to repay the debt that's coming due
- if Telesat still can't pay, lenders get first claim on its entire stake in Lightspeed, the low-Earth-orbit satellite network it's building

The fight is over a move the lenders say Telesat made in September 2025, putting 62 per cent of its Lightspeed ownership out of reach of the assets that back their loans. Telesat disputes that, calls the lenders' lawsuits without merit and says it will defend itself in New York and Canadian courts. CEO Dan Goldberg says the company is focused on a refinancing that's fair to everyone. People working with the lenders told the FT there has been little real negotiation.

ATB Cormark analyst David McFadgen warned that both sides think they have the stronger legal position, so the dispute could run right up to the Dec. 6 deadline, and Telesat could default.

## Why Ottawa cares

Lightspeed is the federal government's main hope for satellite internet that isn't Starlink. Ottawa and Quebec lent Telesat $2.54 billion for it in 2024, and federal loans and contracts now total more than $5 billion, iPhone in Canada reports. Prime Minister Mark Carney said last week that Canada can't drop Starlink overnight and [pointed to working with Europe](https://thecircuit.ca/posts/2026-11-02-briefing/) on satellite networks.

None of Lightspeed's planned 225 satellites are in orbit yet, and service isn't expected until early 2028. Revenue from Telesat's older satellites is shrinking: [its last quarterly report](https://betakit.com/telesat-posts-q3-losses-as-satellite-company-offers-no-assurances-on-ability-to-pay-back-debt/) showed revenue down 20 per cent, and it said there was "no assurance" its plans to deal with the debt would work.

**Why it matters:** Lightspeed isn't running yet, so nothing changes for internet users today. But a default could put control of Canada's planned Starlink alternative, which taxpayers have backed with billions in loans and contracts, in the hands of U.S. funds. Watch Dec. 6, and whether Ottawa steps in before then.