BCI to Sell Indirect Interest in Telecom Américas

On June 3, 2002, Bell Canada International Inc. (BCI) announced that it had reached a definitive agreement dated as of May 31, 2002, for the sale of its indirect interest in Telecom Américas Ltd. to América Móvil S.A. de C.V. for approximately US$366 million. Effective May 31, 2002, BCI’s lenders under its $230 million bank credit facility approved the proposed sale and concurrently therewith, the credit facility was reduced to $200 million and its maturity advanced from March 2003 to August 9, 2002.

At meetings held on July 12, 2002, BCI’s shareholders and holders of BCI’s 11 per cent senior unsecured notes approved, by in excess of 99 per cent of the votes cast in person or by proxy, a court supervised plan of arrangement pursuant to s. 192 of the Canada Business Corporations Act under which BCI will: (i) conclude the sale of its indirect interest in Telecom Américas; (ii) consolidate its currently outstanding common shares on the basis of a consolidation ratio that would result in BCI having 40 million outstanding common shares; (iii) proceed with the disposition of its remaining assets in an orderly fashion; (iv) seek expeditious resolution of outstanding claims against BCI; (v) following the disposition of all its assets and the determination of all claims against BCI, liquidate itself and make a final distribution to BCI stakeholders with the approval of the court; and (vi) ultimately dissolve itself.

On July 17, 2002, the Ontario Superior Court of Justice approved the plan. Having obtained the approval of its shareholders, noteholders and the court for the plan, all required conditions to complete the sale of BCI’s interest in Telecom Américas were met, and thus, on July 24, 2002, both the transaction was closed and the bank credit facility was repaid in full and cancelled. In addition, following court approval of the plan, BCI effected the consolidation of its 4,797,313,638 outstanding common shares on the basis of a consolidation ratio of one share for approximately every 120 shares held, which resulted in BCI having 40 million common shares outstanding and trading on a post-consolidation basis on the Toronto Stock Exchange and the Nasdaq National Market as of July 22, 2002.

BCI was represented in-house by Mark Hounsell, vice-president, law, and corporate secretary; and Keith Flavell, senior legal counsel; assisted by Ogilvy Renault in Montreal and Toronto, with a team comprised of Norman Steinberg, Steve Malas, Dominique Fortin and Catherine Mateu (corporate securities), Derrick Tay, John Porter and Alan Mersky (restructuring and insolvency and court proceeding for the arrangement), Ruth Wahl and Charlotte Conlin (research and strategy), Christian Sioufi (financing) and Jules Charette and John Leopardi (taxation). Shearman & Sterling was U.S. counsel to BCI, with a team comprised of Brice Voran, Paul Rivett, Bob Nguyen and Doug Nathanson (corporate securities). Shearman & Sterling was also U.S. counsel to Telecom Américas, with a team comprised of Mark Roppel, Simon Fraser and Jeffrey Legault (mergers and acquisitions).

BCE Inc. was represented in-house by Martine Turcotte, chief legal officer; and Patricia Olah, vice-president, corporate affairs, BCE Ventures Inc.; with advice provided by McCarthy Tétrault LLP, with a team comprised of Lorna Telfer and Thomas Davis (corporate securities), Sylvain Vauclair (restructuring and insolvency), Paul Morisson and Grant Worden (court proceeding for the arrangement) and Martin Boodman (research and strategy).