TORONTO – BCE Inc’s $51.7 billion privatization deal could be nixed if a Quebec Superior Court sides with some debtholders opposing the agreement, according to the Financial Report.
The opposing bondholders, which include Manulife Financial Corp. and Franklin Templeton Investment Corp., are suing BCE Inc., saying they have the right to vote on and potentially block the “reorganization.” They are unhappy that the leveraged buyout has resulted in credit rating downgrades to BCE Inc.
The Ontario Teachers’ Pension Plan, the player with the largest stake in the buyout, said it would be impossible to find the money if the Quebec court orders the fund and its partners to buy out the disgruntled bondholders.
“Such an order would not only be patently unfair and unjust in the substantial financial hardship it would cause the purchaser, but, given the leveraged buy-out nature of the privatization transaction, the current conditions of the credit markets, and the size of the amounts involved, the availability of funds to comply with such an order is non-existent,” the Teachers’ Pension Plan said in its redacted factum related to the lawsuit.
The Financial Post article said that redacted version of the bondholders’ factum is expected to be released sometime this week.
