BCI Completes Series of Transactions

On February 15, 2002, Bell Canada International Inc. (BCI) announced that it had completed a series of transactions in connection with a recapitalization plan that was announced on December 3, 2001. The plan, which was undertaken in order to improve the financial condition of BCI, included a $440 million rights offering, which closed on January 11, 2002 and pursuant to which BCE Inc. provided a standby commitment ensuring that the maximum gross proceeds from such offering were realized. The transactions completed on February 15, 2002 consisted of: (i) the issuance of 2,988,986,201 common shares upon the automatic exercise of principal warrants issued to BCI shareholders who exercised their rights under the rights offering: (ii) the issuance of 1,457,938,474 common shares in repayment of the principal amount of $400 million owing under BCI’s 6.75 per cent and 6.5 per cent convertible debentures issued in 1999; and (iii) the issuance of 271,365,570 common shares to BCE in respect of the conversion of the principal and interest owing under a convertible loan made to BCI in September 2001.

In addition, on March 8, 2002, BCI completed a refinancing of credit facilities aggregating $230 million, which were extended by a syndicate of lenders including Citibank Canada, Bank of Montreal and Royal Bank of Canada as co-arrangers.

BCI was represented 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 led by Norman Steinberg and including Steve Malas, Dominique Fortin, Cathy Singer, Christine Dubé, Stephen Kelly and Catherine Mateu (corporate securities), Derrick Tay (restructuring and insolvency), Ruth Wahl and Charlotte Conlin (research and strategy), Jules Charette (tax), Christian Sioufi and George Maughan (refinancing of credit facilities) and Pierre Bienvenu and Leigh Crestohl (creditor issues). Shearman & Sterling was U.S. counsel to BCI, with a team comprised of Brice Voran, Paul Rivett, Bob Nguyen and Doug Nathanson (corporate securities) and Mary Warren and Maysie Anderson (research and strategy). U.K. counsel to BCI was Neil Pathak of Shearman & Sterling.

BCE was represented by Martine Turcotte, chief legal officer, and Patricia Olah, vice-president, corporate affairs, BCE Ventures Inc.; with advice from McCarthy Tétrault LLP, with a team comprised of Lorna Telfer and Martin-Pierre Boulianne (corporate) and Gérald Tremblay (creditor issues).

Acting for the syndicate of lenders in connection with the refinancing of the credit facilities was Étienne Massicotte, Howard Rosenoff and Anthony Penhale of Stikeman Elliott. BMO Nesbitt Burns acted as financial advisors to BCI throughout the process relating to the plan, with a team including Glenn Sauntry, Luigi Fraguelli and Illias Konstantopoulos. David Jackson, Gordon Currie and Scott Mahaffy of Blake, Cassels & Graydon LLP advised BCI’s special committee of the board of directors in its review of the offering and recapitalization. UBS Warburg acted as independent financial advisor to the special committee.