Manitoba Telecom May Sell Stock After Allstream Rejection
“Our preference would be to issue equity,” Chief Executive Officer Pierre Blouin said yesterday in a phone interview from Winnipeg, Manitoba, where the company is based. “We’re really looking at analyzing first what type of amount we would need and exactly what vehicle we would use.”
Manitoba Telecom, the largest phone company in the central Canadian province, planned to inject C$130 million ($124 million) of the proceeds from the Allstream sale into its pension plan and repay C$70 million in short-term debt. Canada last month rejected the C$520 million Allstream sale to Accelero Capital Holdings Sarl Group, the investment firm co-founded by Egyptian billionaire Naguib Sawiris, due to unspecified national security concerns.
Allstream operates a national fibre-optic network that provides critical telecommunications services to businesses and governments, Industry Minister James Moore said in a statement at the time.
The pension deficit has been cut in half this year, in part due to a 70 basis point interest-rate increase, Manitoba Telecom said yesterday in its third-quarter earnings statement. The company’s pension solvency deficit is C$350 million and Manitoba Telecom’s 2014 payment to the plan will be about C$55 million, Blouin said.
Manitoba Telecom said earnings per share declined to 38 cents, from 50 cents a year earlier, as revenue fell 3.7 percent to C$408.4 million.
Manitoba Telecom will notify the market about its equity plans “when we’re ready,” Blouin said. “No time line has been disclosed on that.”
The shares rose 0.3 percent to C$29.49 in Toronto yesterday. The company reported earnings after the end of regular trading. The stock, which has declined 9 percent this year, has two buy, eight hold, and four sell recommendations from analysts, according to data compiled by Bloomberg.
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