(Reuters) -Activist investor Carronade Capital Management is urging Viasat ( VSAT ) to split its broadband and defense units, the Financial Times reported on Thursday, citing people familiar with the matter.

Carronade, which holds a 2.3% stake in the satellite communications firm, plans to issue an open letter to shareholders calling for the defense unit to be spun off - a move it says could unlock as much as $11 billion in value for both businesses, the report said.

Viasat's ( VSAT ) shares rose 3.6% after the report.

The investment firm estimates Viasat's ( VSAT ) total valuation could rise more than 500% if the defense unit is separated, according to the report.

Carronade continues to build its stake in Viasat ( VSAT ) and also holds $30 million of the company's debt, FT said.

The activist investor has held multiple meetings with Viasat's ( VSAT ) management and described the discussions as "constructive," the report added.

Viasat ( VSAT ) has launched a strategic review, but Carronade is pushing to accelerate the process. Its letter is expected to be released just days ahead of Viasat's ( VSAT ) earnings report on Aug. 5.

Both Carronade and Viasat ( VSAT ) did not immediately respond to Reuters requests for comment.

Viasat's ( VSAT ) communication services unit posted revenue of $3.3 billion for fiscal year 2025, while the defense segment brought in $1.22 billion.

The company expects mid-teen percentage revenue growth in the defense unit for fiscal 2026, driven by strong double-digit gains in information security, cyber defense, and space and mission systems.