The Ontario Superior Court of Justice has delayed the $32-billion of third-party asset-backed commercial paper (ABCP) restructuring plan.
Justice Colin Campbell adjourned the matter on Friday for further submissions as to whether the plan can be approved and, in particular, whether there could be a process within the Companies’ Creditors Arrangement Act to deal with legitimate, specific and particularized claims of noteholders for fraud, if any, against various parties in connection with ABCP.
He stated that, if the parties can agree on a dispute resolution process within the scope of the CCAA to deal with serious claims of fraud, the plan can go forward immediately.
The judge also directed the parties to return to Court to report on the proposals, if any, for resolving potential claims in fraud by no later than May 30.
For more on the ABCP restructuring, click here to visit our special section, The Paper Chase.
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BCE Falls on Possible Deal Restructuring
Shares of BCE fell as much as 5% Tuesday on media reports the banks participating in the privatization of the company want the deal to be re-priced.
The New York Times reports that the banks backing the deal sent revised terms to the consortium of buyers, which includes the Ontario Teachers’ Pension Plan.
The new terms included higher interest rates, increased protection for the banks and tighter loan restrictions, which exceeds the original terms of the agreement.
Last year, the consortium buying BCE agreed to pay $42.75 a share to take the company private. The stock traded about $5 below the offer price on Tuesday.
For more information about the BCE deal, click here to read our special section, The Rise of Private Equity.
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Private Equity Buyouts Drop
The level of investment activity in the private equity market dropped in the first quarter of this year, according to Canada’s Venture Capital & Private Equity Association and Thomson Reuters.
A total of 29 transactions were completed in Canada during the quarter, with nine of these disclosing their transaction values. The nine disclosed investments totaled $2.9 billion. In the same period last year, a total of $5.1 billion was invested in 36 disclosed buyout transactions.
Reported buyout activity during the first quarter of 2008 was consistent with the performance achieved during the prior quarter when 14 transactions with disclosed values amounted to $2.3 billion and a total of 42 investments were completed.
This level of activity is below the peak levels established in 2007, when 181 transactions were completed during the full year, and 68 disclosed their transaction values totaling $65.5 billion ($18.7 billion without the pending BCE buyout), but remains higher than 2006 or any prior year’s activity. During the full year 2006, a total of 104 transactions were completed, and a total of 40 of these disclosed their transaction values totaling $7.9 billion.
Looking for more about private equity? Click here to check out A Trustee’s Guide to Alternative Investments.