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Should Bell sell off its MLSE stake?

Bell has a debt problem.

The company, formally known as BCE Inc (TSX: BCE), has seen its net debt leverage ratio rise in recent years. Internally, Bell has a net debt leverage ratio target of 3.0, but that figure has grown dramatically over the last decade and a half. In 2010, the company had a target net debt leverage ratio range of 1.5 – 2.0, but that range has steadily increased as the company failed to actually hit the target.

What is the net debt leverage ratio? Bell calculates the figure by dividing its net debt by its adjusted EBITDA, both figures of which don’t fall under GAAP accounting standards. As of December 31, 2023, Bell’s net debt is reported as $36.2 billion, while adjusted EBITDA for the year came in at $10.4 billion, giving the company a net debt leverage ratio of roughly 3.48 for 2023.

You can read more on the matter here.

What’s going on?

• Two Of Big Four Accounting Firms Fail Canadian Audit Standards (theDeepDive)

• Exclusive: Disney prevails over Trian in board fight (Reuters)

• Here’s Yet Another New Way To Tax Canadians (theDeepDive)

• Private payrolls increased by 184,000 in March, better than expected, ADP says (CNBC)

• Canada’s services PMI fell in March as downturn deepened (Globe)

• Another Egg Crisis? Cal-Maine Halts Operations in One Texas Facility Due to Bird Flu (theDeepDive)

• Spotify Is Changing How It Charges Customers, With New Plans and Prices (Bloomberg)

• Taiwan Hit With Magnitude 7.4 Earthquake, Aftershocks Ongoing (theDeepDive)

• The New College Financial-Aid Form Miscalculated 20% of Applications (WSJ)

• Feds Unveil $1.0 Billion National School Food Program (theDeepDive)

• Investor in company that took Trump Media public pleads guilty to insider trading (Reuters)

• Rare Human Case of Deadly Bird Flu Reported in Texas (theDeepDive)

What’s the latest?

• WestJet Strike: WestJet Encore pilots, represented by the Air Line Pilots Association, have voted 97% in favor of a strike authorization, with potential action possible as soon as April 17. This decision comes after negotiations on pay and career progression stalled, and follows a cooling-off period required after federal conciliation efforts.

• Housing Focus: Prime Minister Justin Trudeau announced that the upcoming federal budget will allocate an additional $15 billion (US$11.1 billion) to an apartment construction loan program, increasing its total to $55 billion. This expansion is set to finance the construction of over 131,000 new apartments within the next decade.

• Office Vacancy: Nearly 20% of downtown Toronto office buildings are currently vacant, marking a significant contrast to the general recovery of vacancy rates across Canada. The country's overall office vacancy rate reached 19.5% in the first quarter of 2024, largely influenced by the re-entry of WeWork spaces into the market.

• TD Google Partnership: TD Bank has established a "multi-year strategic relationship" with Google Cloud to enhance its infrastructure and application development capabilities. This partnership, details of which were not disclosed, aims to leverage Google's expertise to refine TD's banking products and services based on customer needs.

• Taiwan Quake: Taiwan experienced its largest earthquake in over 25 years, a 7.2 magnitude quake, causing significant damage, particularly in Hualien County near the epicenter. The disaster resulted in at least nine deaths and over 900 injuries, with 50 workers missing after minibuses headed to Taroko Gorge lost contact.

Uranium: Two decades of bull, bust, bull

The stock market and stuff

• Amazon Abandons Checkout-Less Tech That Secretly Used 1,000 Indian Employees Watching Cameras (theDeepDive)

• Investor in company that took Trump Media public pleads guilty to insider trading (Reuters)

• Utah Governor Signs Bill Allowing State Investment in Gold and Silver (theDeepDive)

• 10-year Treasury yield touches 2024 high after ADP jobs data tops expectations (CNBC)

In the juniors

• Copper Standard Begins 5,000 Metre Drill Program In Search Of Porphyry (theDeepDive)

• Cytophage: Landmark Phage Therapy Saves Ottawa Woman From Life-Threatening Infection (theDeepDive)

• Sendero Resources Hits 256 Metres Of 0.29 g/t Gold In Maiden Program (theDeepDive)

FULL DISCLOSURE: Sterling Metals is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Sterling Metals. The author has been compensated to cover Sterling Metals on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.