Investors Unimpressed about Aliant Restructuring Plans

5:30 am on March 9, 2006 | Category: Business, Telecom Services

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Bell Canada Enterprises has announced plans to combine the fixed line operations of Atlantic provider, Aliant, with its rural telephone business, and spin them off as an income trust.

The move will involve combining Aliant’s customer base of 1.4 million residential phone and internet customers in the Atlantic provinces with the Bell Nordiq Income Fund, which operates a telephone business in rural Ontario and Quebec.

This latest restructuring move, however, has failed to boost the company’s sluggish stock price. Investors simply aren’t convinced about claims that this decision will result in “significantly greater long-term potential than either Aliant or the regional phone trust would have on its own.”

“This transaction is more about financial engineering,” said Felix Narhi, a Vancouver analyst with Odlum Brown Ltd. “They are converting a bunch of assets they are not getting credit for into a popular investment vehicle. There is nothing fundamentally different about [BCE] from a operating standpoint.”

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    Edited by Jeremy Maddock