Canada Rejects Mts Sale Of Allstream To Accelero Over Security

Canada PM to miss Commonwealth summit, cites Sri Lanka rights

(MBT) s C$520 million ($504 million) sale of its Allstream division to Accelero Capital Holdings Sarl Group, the investment firm co-founded by Egyptian billionaire Naguib Sawiris , citing national security concerns. MTS Allstream operates a national fiber-optic network that provides critical telecommunications services to businesses and governments, including the government of Canada, Industry Minister James Moore said in a statement today. He did not elaborate on his concerns. MTS Allstream is extremely surprised and disappointed by this decision, the Winnipeg-based company said in a statement. MTS Allstream and Accelero have responded openly and constructively to Industry Canadas requests for information in the 136 days since the transaction was announced. The decision raises questions about Canadian ownership policy in the wireless industry. Prime Minister Stephen Harper s government has been trying to encourage competition in the nations wireless sector, while stepping up scrutiny of foreign investments. It tightened the national security provision of its foreign-takeover law in June, and made changes to boost oversight of acquisitions by state-owned enterprises. Accelero has proposed far-reaching, comprehensive and binding undertakings to the Canadian government, including a commitment to invest C$300 million over three years to pursue Allstreams capital plans, Manitoba Telecom said, adding the two companies are reviewing their options. No Appeal We were told right at the end of the afternoon that the minister has now rendered the decision and that was it, Pierre Blouin, Manitoba Telecoms chief executive officer, said in an interview. Theres no appeal in that type of process. The Canadian government automatically reviews foreign takeovers of businesses with more than C$344 million in assets under a law called the Investment Canada Act. The law allows the government to block deals deemed a threat to security. In a separate statement, Paris and Cairo-based Accelero said it was disappointed in the decision, which it called unfounded and unexpected. In his earlier foray into Canada, Sawiriss Orascom Telecom Holding SAE backed Wind Mobile, an Ontario-based startup carrier, with a $700 million loan in 2008, helping finance the companys purchase of wireless spectrum. Wind Mobiles initial strategy of offering cheap prepaid wireless service faced competition from other discount operators such as Public Mobile, as well as the established brands. To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net More News:

View gallery Canada’s Prime Minister Stephen Harper waves as he boards a Royal Canadian Air Force plane before departing By David Ljunggren OTTAWA (Reuters) – Canadian Prime Minister Stephen Harper said on Monday he would not attend a November summit of the Commonwealth in Sri Lanka because of what he called human rights abuses on the island. “We remain disturbed by ongoing reports of intimidation and incarceration of political leaders and journalists, harassment of minorities, reported disappearances, and allegations of extra judicial killings,” he said in a statement. Sri Lanka’s envoy to Canada disputed Harper’s comments. The U.N.’s human rights chief said last month that Sri Lanka could be sliding toward an authoritarian system as President Mahinda Rajapaksa gathered power around him. Harper is the only leader from the Commonwealth, which groups Britain and many former colonies, to announce he will boycott the November summit. Britain also has criticized human rights in Sri Lanka. Harper said it was unacceptable that Sri Lanka had yet to investigate allegations of atrocities during and after a long civil war with Tamil rebels, which ended in 2009. Sri Lanka has long dismissed allegations its troops committed major crimes. “It is clear that the Sri Lankan government has failed to uphold the Commonwealth’s core values, which are cherished by Canadians … I will not attend the 2013 Commonwealth Heads of Government meeting in Colombo,” he said. Chitranganee Wagiswara, Sri Lanka’s high commissioner to Canada, disputed the idea that the human rights situation was bad. “We don’t accept what is being said,” she told Reuters by telephone, saying Harper himself had noted advances in human rights in 2011. “We know maybe there are many areas to (still) address but at the same time, over the last short period of four years we have made progress which is recognized by most in the international community,” she said. Canada will be represented in Colombo by Deepak Obhrai, the parliamentary secretary to Foreign Minister John Baird.