Court fast-tracks BCE's application to appeal lower court's blockage of its proposed privatization

By Lisa Kerner

Charlotte, N.C., May 27 - The Supreme Court of Canada granted a motion to expedite the leave application in BCE Inc.'s proposed plan of arrangement.

It was previously reported that BCE's plan of arrangement was suspended by the Quebec Court of Appeal on May 21. Investors holding Bell Canada debentures complained the arrangement to privatize BCE was unfair.

Responses to the application for leave to appeal must be served and filed by May 30 under the schedule set forth by the Supreme Court.

The appeals court found that the BCE board had failed to consider the interests of the debenture holders as they were bound to do under Canadian law, a prior news release said.

A committee of 97 bondholders, made up of life insurance groups and money managers, was one of two bondholder groups opposing the plan of arrangement.

Committee members objected to the proposed plan of arrangement, saying they would be forced to guarantee $34 billion in loans without receiving anything in return.

The plan led to a "dramatic" decrease in the market value of the bonds and caused some credit agencies to downgrade the bonds' status from investment grade to junk, a committee representative said.

Among the members of the committee were Addenda Capital Inc., CIBC Global Asset Management Inc., Franklin Templeton Investments Corp., Her Majesty the Queen in Right of Alberta, as Represented by the Minister of Finance, Manulife Financial Corp., Phillips, Hager & North Investment Management Ltd., Sun Life Assurance Co. of Canada, TD Asset Management Inc. and Wawanesa Life Insurance Co.

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.

The investor group also includes Providence Equity Partners Inc., Madison Dearborn Partners LLC and Merrill Lynch Global Private Equity.

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

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