Comparing two Telecom Deals

The 2013 Financial Statements of the Municipality of Kincardine contain the following entry

In July 2013 the council of the Municipality committed to selling the assets of Bruce Telecom   At that date the tangible capital assets of Bruce Telecom were considered held for sale and were therefore recognized at their net recoverable amount and removed from tangible capital assets 
The council accepted an offer to sell the tangible capital assets of Bruce Telecom on January 21 2014 for a price of $24M An impairment of 8,388, 297 resulted from writing down Bruce Telecoms tangible capital assets to this value

The revenue from Bruce Telecom in 2012 was around $18M with $17M in expenses. I do not know if those expenses include depreciation or not.

So the value of the assets of this corporation were $32.4M dollars and the company sold for $24 M with no further financial contribution required by the Municipality of Kincardine to Eastlink.


The 2013 Financial Statements of ONTC contain the following information about Ontera

Assets (in thousands)

Ontera                                               Cost    Accum   Net Book
                                                                       Deprec         Value

Equipment                                165,828 127,368       38,460 
Buildings                                      6,751    4,421        2,330    


Ontera
Sales revenue                                                              28,408 
Operating Expense                                                       22,692 
Excess of revenue over expenses before the undernoted      5,716 


Amortization of capital assets            5,151 
Employee future benefit expense        1,720 
Gain on sale of capital assets -             (26)
Interest expense                              1,084 
Deficiency of revenue over expenses  (2,239) 

Ontera was sold for $6M with a further capital contribution of $15M by the Ontario government.

I am no financial expert, and would welcome the opinion of someone knowledgeable about the details, but it seems to me that MNDM made a very poor deal for the Ontario government.  The Competition Bureau may be doing the Ontario taxpayer a favour if they block this deal.

The need for the Competition Bureau to review this transaction has been known from the outset.....if indeed the deal is blocked, it will be very interesting to see MNDM's "Plan B".....and how long it takes them to let the public know what it is.