In November 2008, BCI Inc. (BCE) appeared on the right track to meet a December 2008 deadline to complete a $ 52-billion privatization deal. A consortium had previously winning a leveraged buyout (LBO) bid was According to the estimates submitted write an estimated 32 billion debt to the company. Mere days before the deal the “Termination Date” BCE executives were stunned to hear that KPMG auditors, the deal was put at risk of collapse – based on a clause that usually deserves little attention. Th … Read more »

In November 2008, BCI Inc. (BCE) appeared on the right track to meet a December 2008 deadline to complete a $ 52-billion privatization deal. A consortium had previously winning a leveraged buyout (LBO) bid was According to the estimates submitted write an estimated 32 billion debt to the company. Mere days before the deal the “Termination Date” BCE executives were stunned to hear that KPMG auditors, the deal was put at risk of collapse – based on a clause that usually deserves little attention. The auditors noted that the Company on the basis of the preliminary assessment had not required a “solvency test” which passed the estimated value of BCE assets and liabilities in the event that BCE needs to liquidate in comparison. BCE executives had little time to determine whether the deal could still be saved, and if so, how? Conversely, if the deal could not be completed, which would be organizing the next steps?
«Hide

from
Stephen R. Foerster
Source: Ivey Publishing
4 pages.
Publication Date: Jan 29, 2010. Prod #: 909N29-PDF-ENG
BCE Inc.: World’s Largest LBO Deal in Jeopardy HBR case solution