Decision CRTC 2001-754
Ottawa, 13 December 2001
Mr. Mark R. Hemingway
Senior Vice President, General Counsel & Secretary
Look Communications Inc.
10 Kelfield Street
Re: Application No. 2001-1356-4 - Approved
Request for authority to effect a change in ownership and control of Look Communications Inc.
The Commission has completed its review of the application requesting authority to effect a change in ownership and control of Look Communications Inc. (Look). It is the Commission's understanding that the proposed changes will result from a multi-step capital restructuring.
First, Look proposes to convert all of its Class B variable multiple voting shares into Class A voting shares. As a result, the Class B shareholders mainly; Telesystem Financial Corporation (Telesystem) and Teleglobe Inc. (Teleglobe), would respectively hold approximately 12% and 28% of Look's voting interests. Following the conversion, it is contemplated that the new and current Class A shareholders would reduce their shareholding in Look by way of a share consolidation on a basis of 1 new Class A shares for 100 old Class A shares. Look would then issue additional Class A voting shares to its secured and unsecured creditors. It is estimated that a total of 16,425,493 Class A shares will be issued to secured creditors so that they would have approximately 70% of all issued and outstanding Class A shares. It is noted that Teleglobe and Telesystem are said to represent approximately 99% of the secured creditors. As a result of the capital restructuring, Teleglobe and Telesystem would then hold, directly and indirectly between 33.5% and 37.5% of Look's shares.
It is the Commission's understanding that no shareholders or group of shareholders in association would control Look, and that its board of directors will control it. It is also the Commission's understanding that Teleglobe and Telesystem have committed, commencing in August 2000, to vote in favor of any proposal made by management and thus in favor of any proposed directors by management.
Finally, it is the Commission's understanding that the capital restructuring is part of a Plan of Arrangement to be presented to its shareholders and creditors in order to address the serious financial difficulties that Look is currently encountering.
It is with this understanding that the Commission conditionally approves your application to effect a change in ownership and control by way of a capital restructuring. The approval is with the understanding that its board of directors will control Look and that neither Telesystem nor Teleglobe will have board representation.
Because of the uncertainty surrounding the result of the Plan of Arrangement, it is a condition of approval that Look notifies the Commission within 30 days of the implementation of the Plan of Arrangement. In addition, it is a further condition that documentation clearly demonstrating Look's compliance with the ownership requirements regarding a qualified corporation as defined in the Direction to the CRTC (Ineligibility of Non-Canadians), be filed with the Commission within 60 days of the implementation.
All letters of approval issued by the Commission are made available for public examination at the Commission's central office. The Commission requires you to append this letter to all of your licences.
Date Modified: 2001-12-13