BCE gets go-ahead for spinoff
Sabia says IPO of Telesat business is also in wings
CATHERINE MCLEAN
theglobeandmail.com
"Shareholders yesterday gave BCE Inc. the go-ahead to spin off rural phone lines into an income trust, and chief executive officer Michael Sabia said his next move is an initial public offering for the company's Telesat Canada satellite business.
"Over the past year, we've remade BCE," Mr. Sabia told the company's annual general meeting in Montreal, noting that BCE took a hard look at its assets, pondering how they fit into the plan to lead the market in next-generation communications. "And we made important changes."
The telephone industry is going through a major transformation as cable operators and phone companies move in on each other's turf. Mr. Sabia says Bell Canada must be rebuilt, a process he predicts will take until at least 2008.
He has made a number of big moves to restructure Montreal-based BCE's asset base in recent months. It is merging 1.6 million of Bell's rural phone lines in Ontario and Quebec with Aliant Inc.'s land-line business in Atlantic Canada, and then converting them into an income trust.
He has also shed most of BCE's stake in computer services firm CGI Inc., and plans to reduce its holding in Bell Globemedia, owner of The Globe and Mail and CTV.
Mr. Sabia repeated yesterday that he intends to sell part of BCE's Telesat stake in an IPO, his first public comments on the subject since The Wall Street Journal reported last month that BCE had approached possible buyers for Telesat.
When asked after the meeting if BCE will sell Telesat or proceed with an IPO, Mr. Sabia told reporters that "we're engaged right now in doing lots of work on that. Our intention is to take the company public . . . So we'll proceed down that path, and see how things go."
BCE said more than 99.2 per cent of shareholders at the meeting approved its plans to distribute part of its stake in the new income trust to investors, and pare the number of BCE common shares.
During the meeting, Mr. Sabia outlined other changes on the agenda, including trimming costs, improving customer service, and boosting sales of new services, such as wireless, Internet and television. Bell's traditional land-line business is shrinking as cable companies attract some of its phone subscribers.
BCE chairman Richard Currie said he's spent a long career in business saving, turning and then building a business. "It is hard work, it is difficult and demanding, and not without frustrations," he told shareholders. "For BCE, the sequence of save, turnaround and build has not been available. It has had to do all three at the same time. But I know progress when I see it."
Despite changes to the business and asset mix, BCE's stock price has not wandered far from where it was when Mr. Sabia took the helm on April 24, 2002. The stock traded then at $27.55. Yesterday, it rose 3 cents to $27.53 on the Toronto Stock Exchange.
"Our responsibility is to work to create value for shareholders," Mr. Sabia told investors. "I think we're in the process of realizing our goals. I think on the market we are just at the point to gain more traction there as we continue to deliver and work through a very challenging transition for the company." |
