Bell Canada International Inc.
NEX BOARD : BI.H

Bell Canada International Inc.

June 04, 2007 16:38 ET

BCI Announces Record and Payment Dates for its Final Distribution to Shareholders of $1.0245 per Share

MONTREAL, QUEBEC--(Marketwire - June 4, 2007) - BCI (NEX:BI.H) today announced that it intends to make a $1.0245 per share ($40.98 million in the aggregate) final distribution to its shareholders of record on June 13, 2007, for payment on June 27, 2007 (the "Final Distribution"). The Final Distribution has been approved by the Ontario Superior Court of Justice (the "Court") in the context of BCI's Plan of Arrangement. The Final Distribution will be in the form of a return of capital and is subject to the continued applicability of tax clearance certificates. ON JUNE 8, 2007, BCI'S SHARES WILL BE BEGIN TRADING "EX-DISTRIBUTION" AT WHICH TIME THE SHARES WILL HAVE NO INTRINSIC VALUE.

Immediately following its Final Distribution, BCI intends to delist its shares from the NEX Exchange and to cancel all of its outstanding shares. On or about June 29, 2007, shareholders will no longer be able to obtain information about BCI from its website. The only sources of information about BCI will be historical publications in shareholders' possession or such publications that may be accessible through websites such as www.sedar.com. Formal dissolution of BCI is expected to occur on August 15, 2007.

Canada Federal Income Tax Considerations

The following summary is of a general nature only, applies only to shareholders holding their BCI common shares as capital property, and is not meant to be legal or tax advice to shareholders of BCI. Shareholders should consult with their own tax advisors with respect to the impact of the Final Distribution.

Residents of Canada

The Final Distribution to shareholders of BCI who, for purposes of the Income Tax Act (Canada) (the "ITA"), are residents of Canada (a "Resident Shareholder"), represents a reduction in the paid-up capital of the BCI common shares (the "Common Shares"). No dividend or benefit will be deemed to have been paid to such Resident Shareholder as a result of the Final Distribution as the amount of the Final Distribution does not exceed the paid-up capital of the Common Shares for tax purposes. However, Resident Shareholders receiving the Final Distribution will be required to reduce the adjusted cost base of their Common Shares by an amount equal to the Final Distribution. To the extent that the Final Distribution on the Common Shares exceeds the adjusted cost base of such shares the Resident Shareholder will realize a capital gain at that time.

A Resident Shareholder will also generally be considered to have disposed of his or her Common Shares at the time such Common Shares are cancelled. It should be noted that the Canada Revenue Agency (the "CRA") considers that there may be a disposition of the shares of a corporation even though the formal dissolution of the corporation has not been completed and the shares have not been cancelled when there is substantial evidence that the corporation will be dissolved within a short period of time. It is anticipated that BCI will cancel the Common Shares and formally dissolve shortly after the Final Distribution.

Upon the disposition of his or her Common Shares (which will occur upon the cancelation of such shares), a Resident Shareholder (other than a shareholder who will realize a capital gain in the circumstances described above) will generally sustain a capital loss equal to the adjusted cost base of his or her shares at the time of such disposition. Such adjusted cost base must be adjusted to reflect the Final Distribution received by such Resident Shareholder and any other previous distributions made by BCI to such Resident Shareholder by way of a reduction in the paid-up capital of the Common Shares.

Non-Residents of Canada

Subject to the following comments, the summary of Canadian federal income tax consequences applicable to Resident Shareholders, as discussed above under "Residents of Canada", would generally apply to holders of the Common Shares who, for the purposes of the ITA and any applicable tax treaty, and at all relevant times, are not residents of Canada (a "Non-Resident Shareholder"). This includes the comments above with respect to a disposition as a result of the Final Distribution or cancellation of their Common Shares.

The Common Shares are listed on the NEX board of the TSX Venture Exchange. The NEX is not currently considered a prescribed stock exchange for purposes of the ITA and, consequently, the Common Shares held by a Non-Resident Shareholder constitute "taxable Canadian property" to such a shareholder. As a result, any capital gain resulting from the Final Distribution or a disposition of the Common Shares will be subject to Canadian tax to a Non-Resident Shareholder unless the resulting capital gain is exempt from Canadian tax under a bilateral tax convention entered into by Canada and another country. However, it should be noted that the CRA has advised BCI that the requirements of section 116 of the ITA (including the withholding requirements) will not apply to the Final Distribution.

CAUTION CONCERNING FORWARD - LOOKING STATEMENTS

Certain statements made in this press release describing BCI's intentions, expectations or predictions are forward-looking and are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. The factor that could cause actual events to differ materially from current expectations is whether any unforeseen claims are asserted against BCI (or its directors or officers) in connection with the winding-up and liquidation of BCI pursuant to the Plan of Arrangement or otherwise. In addition, forward looking statements do not reflect the potential impact of any legal or regulatory proceedings that may be announced after the statements are made. BCI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information