Supreme Court of Canada clears way for BCE's privatization

By Lisa Kerner

Charlotte, N.C., June 20 - The Supreme Court of Canada set aside a lower court decision, affirming BCE Inc.'s privatization by way of a plan of arrangement, it was announced on Friday.

The cross appeals were dismissed with costs.

It was previously reported that the Supreme Court of Canada fast-tracked BCE's application to appeal a lower court's blockage of its planned privatization.

Investors holding Bell Canada debentures complained the arrangement to privatize BCE was unfair, believing they would be forced to guarantee $34 billion in loans without receiving anything in return, a prior news release stated.

"Today's unanimous decision by the Supreme Court affirms BCE's long standing position that the plan of arrangement complies with the rights and reasonable expectations of Bell Canada debentureholders," chairman of the board of BCE and Bell Canada Richard J. Currie said in a BCE news release.

BCE said its plan was approved by the Canadian Radio-television and Telecommunications Commission, and Industry Canada's approval is expected during the week of June 23. As a result, all third-party approvals necessary for the transaction will be obtained before June 30 and BCE's objective is to close the transaction in the third quarter of 2008.

The committees comprising some institutional holders of the 1976, 1996 and 1997 Bell Canada debentures expressed disappointment in the Supreme Court of Canada's ruling but noted they had a duty to protect the interests of their clients in contesting the plan of arrangement, a Bell Canada statement said.

Citigroup, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion Bank have committed to financing the debt portion of BCE's sale to a consortium of investors.

The banks said they will continue to negotiate the financing documents in good faith with the sponsors and remain committed to the transaction.

On July 2, 2007, an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, agreed to acquire all of the common shares of BCE not owned by Ontario Teachers for C$42.75 each and all of the company's preferred shares at between C$25.25 and C$25.87 each.

BCE is a Montreal-based communications company that provides telephone, internet, television and information services.

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